Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

North Metropolitan Electric Power Supply Bill [Lords],

As amended, considered; to be read the Third time.

Oral Answers to Questions — ITALY AND ABYSSINIA.

Mr. MANDER: asked the Secretary of State for Foreign Affairs what plans relating to an Italian attack upon Egypt or British territory came into the possession of the British Government in July, August, or September, 1935; what representations were made to the Italian Government on the matter; and what action was taken?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Viscount Cranborne): The answer to the first part of the question is None, Sir. The second and third parts do not therefore arise.

Mr. MANDER: In view of the fact that the alleged incident is widely believed in the Army and Navy in the Mediterranean, and in Europe and America, will the Noble Lord give the widest publicity he can to his reply?

Viscount CRANBORNE: I hope that my answer will have done that.

Mr. MANDER: Do I understand that at no time had the Government any expectation of an Italian attack on Egypt?

Viscount CRANBORNE: I have answered the question which the hon. Member put to me.

Mr. MANDER: asked the Secretary of State for Foreign Affairs whether the

refusal of the British Government to recognise the Italian conquest of Abyssinia at the next meeting of the Assembly applies equally to the September meeting of the Assembly?

Viscount CRANBORNE: The policy of His Majesty's Government at the present meeting of the Assembly with regard to recognition of the Italian annexation of Abyssinia was defined by my right hon. Friend in answer to a question by the hon. Lady the Member for the Combined English Universities (Miss Rathbone) on 22nd June. It is not possible or desirable to make pronouncements with regard to the policy to be followed at future meetings of the Assembly, until it is know what matters are likely to be raised at them.

Mr. MANDER: Do I understand that the Government hold themselves free at the September meeting of the Assembly to recognise the Italian conquest of Ethiopia?

Viscount CRANBORNE: No, Sir. The hon. Member must not read more into my answer than is in it.

Mr. THURTLE: Is it not unreasonable to expect His Majesty's Government to maintain the same foreign policy for as long a period as three months?

Mr. MANDER: asked the Secretary of State for Foreign Affairs what British representatives, diplomatic or consular, are at present in Ethiopia; to whom they are accredited; and whether any change is contemplated?

Viscount CRANBORNE: His Majesty's Legation at Addis Ababa is at present in the charge of Mr. Roberts, the First Secretary, as His Majesty's Chargé d'Affaires in the absence on leave of the Minister accredited to the Emperor. He is in contact with the Italian Command as representing the power in military occupation. The only Consular posts which are still open are the Consulates at Harar, under Mr. Chapman Andrews, and that at Gore, under Captain Erskine. Consular officers are not accredited to anyone, but these two officers are in contact with the local authorities who, in the case of Harar, are Italian, and in that of Gore, Abyssinian. No immediate change is in contemplation but the situation is under constant review.

Mr. MANDER: Do I understand that the officer at Addis Ababa is accredited to the Emperor of Ethiopia?

Viscount CRANBORNE: Perhaps the hon. Member will consider my answer.

Mr. RILEY: asked the Secretary of State for Foreign Affairs whether the Italian Government has made any proposal to the League of Nations regarding the future government of Abyssinia, whether by voluntary mandate or otherwise; and whether he can state the terms of the Italian proposal?

Viscount CRANBORNE: I understand that a note addressed by the Italian Minister for Foreign Affairs to the President of the Assembly of the League was circulated to the Assembly yesterday. The full official text has not yet reached me.

Mr. MARKHAM: (by Private Notice) asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the occupation by the Italians of Moyale, a town shown as being in Kenya Colony, and whether he has a statement to make?

Viscount CRANBORNE: I understand that there are two places named Moyale, one of which is in Kenya and the other in Abyssinia. His Majesty's Government have received no report, either from the Governor of Kenya or from any other source, tending to confirm the report mentioned in my hon. Friend's question, though it may be that the Italian forces have occupied the town named Moyale in Abyssinia. There is no reason whatever to suppose that they have occupied Moyale in Kenya which is, moreover, a military post.

Mr. MARKHAM: Is the Under-Secretary of State aware that the only Moyale mentioned on the official map issued by the Colonial Office is definitely shown as being in Kenya?

Viscount CRANBORNE: I understand that there is another town of that name which is in Abyssinia.

Mr. WISE: Is it not the case that that is an extremely badly-surveyed part of the British Empire, and that it is perfectly easy for about 17 or 20 towns to be missed out from that particular map?

Oral Answers to Questions — GERMANY.

RHINELAND.

Mr. A. HENDERSON: asked the Secretary of State for Foreign Affairs whether he can make any statement as to whether the construction of fortifications or other measures of military defence is taking place in the demilitarised zone in the Rhineland?

Viscount CRANBORNE: His Majesty's Government have no official information that fortifications are at present under construction in the Rhineland.

Mr. HENDERSON: In view of the misgivings which exist at the present time following the reoccupation of the Rhineland by Germany would it not be possible for His Majesty's Government to make strong representations to the German Government as to the desirability of answering the questionnaire?

Viscount CRANBORNE: That is an entirely different question.

Mr. BOOTHBY: Is it possible for His Majesty's Government to make some inquiries with a view to ascertaining whether fortifications are being erected or not?

Viscount CRANBORNE: I will consider that.

AIR ARMAMENTS.

Mr. E. J. WI,LLIAMS: asked the Prime Minister on what approximate date he became aware of the abnormal increase of the air armaments of Germany?

The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Simon): The increase to which the hon. Gentleman refers was dealt with in the Debate of 19th March of last year, and the material upon which this view was based came before the Government somewhat prior to that date.

Mr. WILLIAMS: Has the right hon. Gentleman sought to find out when the Prime Minister will reply to the charge that was made last week-end by the ex-Minister for Air, which implied that this House had had information withheld from it?

Mr. SPEAKER: There is a question on the Paper to-morrow on that subject.

CHINA (SMUGGLING).

Mr. MOREING: asked the Secretary of State for Foreign Affairs whether he will take an early opportunity of discussing with the new Japanese Ambassador the question of stopping the smuggling of goods into China by Japanese subjects; and whether he will especially draw attention to the necessity for allowing Chinese Customs officers complete freedom of action in the discharge of their duties?

Mr. MORGAN: asked the Secretary of State for Foreign Affairs (1) whether, having regard to the fact that more than eight weeks have elapsed since he first made representations to the Japanese Government through His Majesty's Ambassador in Tokyo as to the serious effects of smuggling into North China, facilitated by the restrictions imposed by the Japanese authorities in that area upon the Chinese Customs officials, he will now represent to the Japanese Government that the matter should be settled without further delay;
(2) what action he proposes to take in view of the continued failure of the Japanese Government to remove the restrictions placed by the Japanese authorities in North China upon Chinese Customs officials engaged in the prevention of smuggling?

Viscount CRANBORNE: The earliest opportunity has been taken of emphasising to the newly appointed Japanese Ambassador the serious view which His Majesty's Government take of this problem, which had already, as the House is aware, been the subject of urgent representations to the Japanese Government, and in particular the need for the restoration of the means of exercising their authority to the Customs preventive services in North China. His Majesty's Government are at present considering what further steps they can usefully take to facilitate an early settlement of the matter.

Mr. MOREING: asked the Secretary of State for Foreign Affairs whether he has received any information from the Japanese Government or from His Majesty's representative at Tokyo or in Peking as to the results of the visit of the official sent by the Japanese Government to North China to inquire into the extensive smuggling of goods by Japanese importers?

Viscount CRANBORNE: No, Sir.

Mr. MOREING: Can the noble Lord tell me when I shall be able to have any information? It is some time since this official was sent.

Viscount CRANBORNE: My information is that this official has been sent, and my right hon. Friend will not fail to inform the House as soon as he is in a position to do so.

Mr. MOREING: asked the Secretary of State for Foreign Affairs whether he will inquire of His Majesty's Charge d'Affaires in Peking whether the Chinese Government have been able to place customs guards in the goods yards of the railway termini at Tientsin and Peking to prevent the egress of smuggled goods; and, if not, by whom this safeguard has been prevented?

Viscount CRANBORNE: I have no information on this point, but I will make inquiries.

FRANCE AND BELGIUM (LABOUR DISPUTES).

Mr. CREECH JONES: asked the Secretary of State for Foreign Affairs whether, in view of the strikes now in progress in France and Belgium, it has been found necessary for him to take any steps to protect the interests of British subjects?

Viscount CRANBORNE: No, Sir.

Mr. CREECH JONES: Is the Noble Lord aware of the alarmist statements which appeared in a number of newspapers in this country during the weekend as to the bloodshed and terrorism which is going on?

Oral Answers to Questions — ROYAL NAVY.

SUBMARINES.

Mr. DAY: asked the First Lord of the Admiralty His Majesty's Government's future policy for the discontinuance of the existing or the laying down of any new submarines; and whether His Majesty's Government propose to explore the possibility of the position with other nations in illegalising the submarine by mutual agreement?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Lord Stanley): As has frequently been made clear, His Majesty's Government favour the complete abolition of the submarine by agreement between the naval Powers. It has, however, unfortunately proved impossible to secure such agreement, in spite of repeated attempts which have been made since the War. No useful purpose would be served by a further attempt at the present time; and the policy of His Majesty's Government is to continue to lay down new submarines as necessary for the Royal Navy.

Mr. DAY: Can the Noble Lord say whether the United States also agreed to the same principle?

Lord STANLEY: I understand that they also are building submarines.

DRIBTERS.

Mr. BOOTHBY: asked the First Lord of the Admiralty how many drifters are necessary to the Fleet in time of war; and whether he will take steps to ensure that the number of drifters necessary for Admiralty purposes shall be maintained in good condition?

Lord STANLEY: The number of drifters necessary to the Fleet in time of war must naturally depend on the nature and extent of the war. I can assure my hon. Friend that the size and condition of the drifter fleet in relation to Admiralty requirements are kept constantly under review.

Mr. BOOTHBY: Is it not a case for further action rather than keeping the matter "under review"; and that it may he necessary if the Admiralty is to be supplied with a sufficient number of drifters for any purpose in the case of any war, to take steps to ensure that a number of drifters are kept in good condition?

Lord STANLEY: That is what is meant by keeping the matter "under review."

ENGINE-ROOM ARTIFICERS (APPRENTICESHIP).

Sir ROBERT YOUNG: asked the First Lord of the Admiralty whether the recruitment of young men of 19½ to 21 years of age as fifth-class engine-room artificers is now in operation; and, if so, how many have been recruited, and

of the number so recruited how many of them are semi-skilled men and how many of them have served a period of recognised apprenticeship in the engineering industry?

Lord STANLEY: Yes, Sir. Eleven of these men have been recruited, none were semi-skilled, and all have served a period of recognised apprenticeship in the engineering industry.

Sir R. YOUNG: Can the Noble Lorod say what term of apprenticeship has been served?

Lord STANLEY: All these men have served four years' apprenticeship, some of them five years.

Sir R. YOUNG: Is the Noble Lord aware that four years is not a complete apprenticeship?

Lord STANLEY: The hon. Member asked whether they have served an apprenticeship, and I have given him an answer.

Mr. KI R KWOOD: Is the hon. Member aware that the understanding with the engineering industry is that they should serve a period of five years, from 16 to 21 years of age; and is there anything in the reply which contravenes the arrangement made with the trade union and the rest of the industry?

Lord STANLEY: I understand that the arrangement was made by agreement with the trade organisation.

BRITISH HONDURAS (MAHOGANY CUTTING).

Mr. T. JOHNSTON: asked the Secretary of State for the Colonies with regard to the proposals which are now, or recently have been, under consideration for the grant of an exclusive licence for the felling of mahogany on the Crown lands, or any portion thereof, on the Belize River, in British Honduras, the proposed grantee being the Belize Estate and Produce Company, registered in London, whether, before any such exclusive licence is issued, he will satisfy himself that it is in the public interest; and whether he will be prepared to lay papers in the Library explaining the terms of the licence and giving the names of the beneficial owners of the company?

The SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): A proposal which may be that to which the hon. Member refers was submitted to the British Honduras Government by the Belize Estate and Produce Company. I understand that the company were informed by the British Honduras Government on 14th March that consideration of their application would be deferred pending investigation of the area in question by the Forestry Department; and that in due course it was probable that Government would invite tenders for mahogany cutting on the lands in question. The second part of the question does not, therefore, arise.

Mr. JOHNSTON: Is the right hon. Gentleman aware that this company already holds one-fifth of the total area of British Honduras, and before any further concessions are given to this organisation will he make the fullest inquiry?

Mr. ORMSBY-GORE: This is one of the most substantial, best run and oldest companies in British Honduras. It has been engaged for many years in the cutting and export of mahogany timber and I do not think that any further investigations are necessary.

Mr. HARDIE: Can my right hon. Friend tell us what is the class of labour used in this timber felling? Are any of the workers working under compound or slave conditions?

Mr. ORMSBY-GORE: The population in British Honduras is, of course, an extremely mixed one, but there is no such thing as compounds or anything of that kind.

Mr. JOHNSTON: Does the fact that this company is an old-established one make it any better that it should hold more than one-fifth of the Colony?

Mr. ORMSBY-GORE: That is not the point. The exploitation of the tropical forest and the getting out of the timber is a technical job, and an old-established company is much more likely to get that timber out for the use of humanity than people who know nothing about it. I have no objection to this company, and see no reason why any reflection should be cast on it.

Mr. JOHNSTON: Is it not the case that they are asking for exclusive ownership?

Mr. ORMSBY-GORE: I have no evidence to that effect.

NYASALAND (NATIVE LABOUR, EMIGRATION).

Captain McEWEN: asked the Secretary of State for the Colonies whether he has received from the Governor of Nyasaland the report of a Commission to consider the question of emigrant labour; whether the report is of a satisfactory character as to the results, both moral and economic, of such emigration; and what action he proposes to take in the matter?

Mr. ORMSBY-GORE: I have recently received a copy of the report referred to. The committee came to the conclusion that the results of the hitherto almost uncontrolled emigration of native labour had been most harmful to village and tribal life, and that a continuance of present conditions would have a very serious effect on the future of the Protectorate. I am awaiting, the Governor's considered recommendations before coming to any decisions as to the various lines of action which would seem to be called for.

Oral Answers to Questions — PALESTINE.

CURFEW REGULATIONS.

Mr. T. WILLIAMS: asked the Secretary of State for the Colonies how many of the 1,206 Arabs and 328 Jews, respectively, who have been convicted in connection with recent disturbances in Palestine were convicted for minor offences against the curfew regulations?

Mr. ORMSBY-GORE: The figures referred to in the question include respectively 331 Arabs and 265 Jews convicted of curfew-breaking.

ROYAL COMMISSION.

Mr. MAXTON: asked the Secretary of State for the Colonies whether he is able to announce the names of the members of the Palestine Commission?

Mr. ORMSBY-GORE: The composition of the Royal Commission is engaging my attention, but I am not yet in a position to make any announcement.

Mr. BOOTHBY: In view of the present position in Palestine, will the right hon. Gentleman consider postponing the sending out of this Commission?

Mr. ORMSBY-GORE: I would have notice of that question.

Mr. MAXTON: In view of the present position in Palestine, will the right hon. Gentleman consider expediting the sending of the Commission

Mr. ORMSBY-GORE: In view of the present position in Palestine, it is quite obvious that the Commission cannot go there.

Captain PETER MACDONALD: Does the right hon. Gentleman adhere to the statement he made the other day that in no circumstances would he send the Commission out until law and order are restored?

Mr. ORMSBY-GORE: That is the policy.

Mr. GALLACHER: If the right hon. Gentleman withdrew the troops, would not the position be quite clear for the Commission to go?

SARAFEND CONCENTRATION CAMP.

Mr. T. WILLIAMS: asked the Secretary of State for the Colonies what steps are taken by the Palestine Government to ensure reasonable living conditions at the Sarafend concentration camp?

Mr. ORMSBY-GORE: I have no reason to think that there is any ground for complaint as to the living conditions at Sarafend concentration camp. Sarafend is a healthy locality where many British troops are ordinarily stationed. The plans of the camp are approved by the Director of Medical Services and the internees receive free rations on the scale approved by the medical authorities. Permission has also been granted to establish a canteen within the camp. Electric light and an adequate water supply have been installed. Among themselves, the internees enjoy full freedom of intercourse subject to orderly conduct, and facilities for daily exercise within the camp. Every facility is given for religious worship, and special arrangements have been made for combined prayer for Moslems on Fridays.

SECURITY FORCES (DUTIES).

M. T. WILLIAMS: asked the Secretary of State for the Colonies whether he can make any statement on the methods employed by military forces

when searching premises for arms and ammunition in Palestine; whether civil control is maintained; and whether every step is taken to avoid the destruction of property?

Mr. ORMSBY-GORE: As I stated in the House on 24th June, the High Commissioner has already promised to furnish me in due course with information on the subject of allegations regarding the conduct of the British military forces in Palestine in connection with the disturbances. The country remains under the administration of the High Commissioner and of the civil authorities. The duties of the security forces as regards search, the disposal of confiscated property, and other matters are defined by regulations made by the High Commissioner under the Defence Order in Council, and I have no reason to think that there is any avoidable destruction of property or that the regulations are not being strictly and properly observed.

JAFFA (DEMOLITION OF HOUSES).

Mr. CREECFI JONES: asked the Secretary of State for the Colonies whether the decision of the Palestine Government to destroy immediately a considerable part of the old city of Jaffa. is necessary for dealing with the present disorders; whether adequate alternative accommodation for the 6,000 inhabitants likely to be displaced has been found; and whether he will cause inquiries to be made with a view to preventing such a drastic destruction of Arab homes?

Mr. ORMSBY-GORE: The demolition works at Jaffa, the nature of which I explained in my speech on 19th June, and in my reply on 24th June to a question by the hon. Member for West Fife (Mr. Gallacher), are considered necessary in the interests of public security. I am satisfied that the Palestine Government has taken and will take any steps that may be thought desirable as regards the accommodation of the displaced families, and I will ask the High Commissioner to furnish me with information on the subject.

Mr. GALLACHER: Am I to take it that the Minister is preparing to make the way of the Commission easy by wiping out the Arab population of Palestine

Mr. ORMSBY-GORE: I must protest against that. Before all these areas in the old City of Jaffa were cleared in order to give access to the port all the population was moved from the areas that were going to be affected. There were no casualties whatever and the operation has been completed without any injuries.

Mr. GALLACHER: Is it not the case that a new great area is being demolished and that no accommodation has been prepared for the Arabs?

Mr. ORMSBY-GORE: That is definitely not true. Special accommodation has been provided.

ITALIAN BROADCASTS.

Mr. SHORT: asked the Secretary of State for the Colonies (1) whether the Palestine Government are keeping a record of the broadcasts from Bari in Arabic, so that they may be available for any Royal Commission in the future;
(2) whether he is aware of the contents of the messages which are being broadcast in Arabic from the Italian station of Bari; that these broadcasts are defaming the British troops and are calculated Lo incite the Arabs to rebellion against the Palestine Government; and whether any representations have been made to those responsible?

Mr. ORMSBY-GORE: Transcripts of some of these broadcasts are kept on record. I am aware of the character of certain broadcast messages from Bari in the past and, as has been more than once stated in this House, representations have been made to the Italian Government. I have not, however, received any report that recent broadcasts have included defamation of British troops, and I am causing inquiry to be made as to this.

Mr. SHINWELL: What was the nature of the reply to the representations made to the Italian Government?

Mr. ORMSBY-GORE: That is a question for the Foreign Secretary.

TRINCOMALEE (WORKERS' STRIKE).

Mr. MAXTON: asked the Secretary of State for the Colonies whether he has

received any report on the strike of workers which occurred some weeks ago at Trincomalee; and whether he can state the circumstances of the dispute?

Mr. ORMSBY-GORE: I have been informed by telegram that 700 unskilled labourers employed by the War Department contractors on earthworks ceased work on 18th April in the belief that the contractor was making large profits by paying them at much lower rates than those provided in the contract for such labour. When, after a few days, and with the assistance of the local member of the State Council, the men were persuaded that there was no truth in this, most of them resumed work on 24th April. There was no disorder, and there has been no further trouble.

Mr. T. WILLIAMS: Can the right hon. Gentleman tell the House the hours that are being worked?

Mr. ORMSBY-GORE: Not without notice.

Mr. MAXTON: Will the right hon. Gentleman convey my grateful thanks to the Government for their expedition in this matter?

MALTA (ST. EDWARD'S COLLEGE, VALETTA).

Captain ALAN GRAHAM: asked the Secretary of State for the Colonies whether, in view of the abolition of party Government in Malta and of the need for increased cultural development in the island, he can now see his way to assist the Secretary of State for War in the further development of St. Edward's College, Valetta?

Mr. ORMSBY-GORE: I fully appreciate the good work that is being done by the college, and I am ready to assist in any way that I can. If my hon. and gallant Friend has any suggestions to offer, I will gladly consider them.

KENYA (FRONTIER RAIDS).

Mr. DAY: asked the Secretary of State for the Colonies whether he will give particulars of the latest report received from the Government of Kenya respecting the raids made by Abyssinian raiders into that Colony to the south of the Kenya-Sudan frontier?

Mr. ORMSBY-GORE: I have no information that there has been any raid into Kenya by Abyssinian tribesmen since September, 1933. On that occasion a Turkana fishing village was attacked by Merille tribesmen. Thirty-eight in all of the Turkana were killed and five children were carried off. The children were all recovered subsequently. It is alleged that this raid was a reprisal for the murder of five Merille by Turkana on the previous night.

Mr. DAY: Will the Minister say whether these raiders were pursued by British troops?

Mr. ORMSBY-GORE: There are no British troops on that frontier. They are the King's African Rifles; they are natives.

Mr. H. G. WILLIAMS: Were any questions addressed to the raiders?

CYPRUS.

Mr. GRAHAM WHITE: asked the Secretary of State for the Colonies to what extent the arrangements for the government of Cyprus made after the disturbances in October, 1931, have been modified?

Mr. ORMSBY-GORE: There has been no formal change in the constitutional position; but, in addition to the Executive Council provided for in the Constitution, an informal advisory council was established in 1933 consisting of members of the Executive Council and certain prominent unofficial persons nominated by the Governor.

Mr. WHITE: May I ask the right hon. Gentleman whether any further modifications are contemplated and whether he thinks the conditions in the island still necessitate this very strict régime?

Mr. ORMSBY-GORE: I shall have to look into that. I may say that the Governor of Cyprus is shortly coming on leave—I think in a, week or two—and there are a good many Cyprus questions I shall want to discuss with him.

Sir HUGH SEELY: asked the Secretary of State for the Colonies whether any censorship of the Press is still in force in Cyprus?

Mr. ORMSBY-GORE: Yes, Sir.

COLONIAL AND DOMINIONS OFFICES (STAFFS).

Mr. VIANT: asked (1) the Secretary of State for the Colonies the number of persons employed in his Department who are in receipt of salary in addition to pension, apart from war or disability pension;
(2) the Secretary of State for Dominion Affairs the number of persons employed in his Department who are in receipt of salary in addition to pension, apart from war or disability pension?

Mr. ORMSBY-GORE: The establishment of the Dominions Office and the Colonial Office is a joint one, and with the hon. Member's permission I will answer this question and No. 78 together on behalf of the two Departments concerned. There are ten persons with naval or military pensions for long service, and eight with pensions from other Governments in respect of service overseas. Of these 18 persons, 13 are employed as messengers or paper-keepers; of the remaining five, only two are established civil servants.

Oral Answers to Questions — AVIATION.

BULVERHYTHE AERODROME.

Mr. HARDIE: asked the Under-Secretary of State for Air what area of land has been purchased for the Bulverhythe Aerodrome; the price per acre; and the name of the party or parties the land was bought from?

The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): The land referred to does not belong to the Air Ministry. It was purchased by the Hastings Corporation for a municipal aerodrome, and I am not, therefore, in a position to supply details of the transaction.

Mr. HARDIE: In view of the Bill now before the House which seeks to control air navigation; does the right hon. Gentleman wish the House to understand that while we are taking all this trouble, the Government have no control and cannot get the information desired

Sir P. SASSOON: The Town Clerk of Hastings will give the hon. Member any information he desires.

Mr. HARDIE: But my point is that the Air Navigation Bill seeks to coordinate all aerodromes and air services,


and I wish to know why we cannot get information directly?

Mr. SPEAKER: The hon. Member has had an answer to the question on the Paper.

AFRICA-AUSTRALIA ROUTE.

Mr. PILKINIGTON: asked the Under-Secretary of State for Air whether he will consider examining the possibilities of an air route between Western Australia and East Africa via the Keeling Islands, Diego Garcia and Seychelles, with a view to developing inter-Imperial communications?

Sir P. SASSOON: The potentialities of this route have been and will be kept carefully in view. It involves, however, long operational stages which are relatively uneconomical in the present state of aeronautical science and so preclude its consideration for development concurrently with the more economical Empire trunk routes, the development of which it is proposed to intensify under the Empire Air Transport Scheme.

EMPIRE FLYING BOAT.

Mrs. TATE: asked the Under-Secretary of State for Air when the first Empire flying boat, under construction in Messrs. Short's factory at Rochester, is to make its trial flight?

Sir P. SASSOON: My information is that it is intended to have trial flights made in the course of the present month.

Mrs. TATE: In view of the fact that many Members of Parliament visited the factory on 18th March and were informed that the flight would take place within a month, can the right hon. Gentleman explain the cause of the delay?

Sir P. SASSOON: There has been a delay due to technical causes, but I think that when the trial takes. place my hon. Friend will be satisfied.

AIR LINE TICKETS (AGENCIES).

Mrs. TATE: asked the Minister of Transport whether, in view of the fact that the Government have guaranteed a loan of £26,500,000 to the railways for the modernisation of their lines, pressure will be brought to hear upon them to ensue that they will not in future prevent the sale of tickets for air lines

other than railway air lines at travel agencies in this country?

The MINISTER of TRANSPORT (Mr. Hore-Belisha): The terms of the agreement to which the hon. lady refers were settled and approved by Parliament last year.

Mrs. TATE: In view of the fact that it is not possible for a citizen of this country to book a ticket, for instance to Denmark, on a British air line other than a subsidised line, while it is possible for him to book on a foreign line, is it not time that some Department looked into this extraordinary state of affairs?

Mr. HORE-BELISHA: That may or may not be the case, hut it is a domestic matter for the railway agencies. If they want to sell aeroplane tickets or motor coach tickets, they can do so by arrangement, but it is not for the Government to impose conditions on them.

Sir PERCY HARRIS: Is it right that tourist agencies should limit the facilities of travel for the public to particular lines; and would the right hon. Gentleman use his influence with the railway companies to prevent blackmail of that sort?

Mr. HORE-BELISHA: I do not think it would facilitate any negotiations which I might undertake with the railway companies if I were to begin by accusing them of blackmail.

Mrs. TATE: In view of the fact that when I address a question on this subject to the Secretary of State for Air, I am told that it is a matter for the railways, and when I address it to the railways, I am told it is nobody's business, can I be informed which Department I am to approach on the matter?

Mr. HORE-BELISHA: I have tried to make it clear that the agencies of the railway companies are private concerns and can sell railway tickets or any other kind of tickets by arrangement. They are under no compulsion to sell any particular kind of tickets, any more than an air line agency would be under compulsion to sell railway tickets, and the Government cannot impose compulsion on them.

Oral Answers to Questions — ROYAL AIR FORCE.

ACCIDENT, SOLENT.

Captain P. MACDONALD: asked the Under-Secretary of State for Air whether he is now in a position to make a further statement in regard to the causes of the recent accident when a Royal Air Force bombing machine crashed on board the French liner "Normandie"; and what regulations apply to aircraft as regards low flying in the Solent and, in particular, over vessels navigating therein?

Sir P. SASSOON: The case will be dealt with by court-martial procedure, and in these circumstances my hon. and gallant Friend will realise that I cannot in the meantime make any statement as to the cause of the accident. As regards the second part of the question, the King's Regulations and Air Council Instructions for the Royal Air Force forbid low flying over ships at sea or at anchor, except during operations and exercises which render such low flying necessary for their proper fulfilment. This regulation applies, of course, to the Solent as well as other waters.

Captain MACDONALD: Will instructions be issued by the right hon. Gentleman's Department to see that these regulations are carried out in future?

Sir P. SASSOON: Certainly, if the regulations are not being carried out, instructions will be issued.

Mr. GEORGE GRIFFITHS: Is it not a fact that the regulations cannot be carried out while the men are fed on margarine?

PAGEANT (BOMBING DEMONSTRATIONS).

Miss WILKINSON: asked the Under-Secretary of State for Air whether, now he has had time to consider the matter, he will give instructions that scenes purporting to represent the bombing of coloured peoples will form no part of any future Royal Air Force pageant?

Sir P. SASSOON: For the reasons indicated in the answer which I gave to the hon. Member's question last week, my Noble Friend does not consider that any such instructions are required.

Miss WILKINSON: Does the right hon. Gentleman think that in the present state of feeling, and particularly in view of

the position as regards Italy and Abyssinia, it is really tactful to give these demonstrations of the bombing of native peoples?

Sir P. SASSOON: That does not arise out of the programme of the display. The people were not coloured and as far as I could see they were dressed in ordinary white overalls and the loud speaker informed us that they came from "The Valley of the Moon." I do not think the presentation of an imaginary picture of that kind, would be misunderstood here or in any country.

Miss WILKINSON: Is the right hon. Gentleman aware that one of the Italian operations in the neighbourhood of Ganda took place in the Valley of the Moon and that therefore, the selection of that title was, again, not very tactful?

Oral Answers to Questions — TRANSPORT.

FORTH ROAD-BRIDGE.

Mr. MATHERS: asked the Minister of Transport whether he has received the estimate of probable traffic results for which he asked the promoters of the projected Forth road-bridge; and when a statement of Government policy regarding the scheme will be announced?

Mr. H0RE-BELISHA: I would refer the hon. Member to the reply which I gave yesterday to a similar question by the hon. Member for Kirkcaldy (Mr. Kennedy).

Mr. MATHERS: Is the right hon. Gentleman taking steps to expedite the presentation of the further case which is required

Mr. HORE-BELISHA: The case is being presented by the local authorities who are collecting their material.

Mr. MATHERS: What I am asking the Minister is whether, having received the case from the promotion committee, he is intimating to the local authorities that he has received that case, and that he wishes to have their case as quickly as possible in order that the Government decision may be announced?

Mr. HORE-BELISHA: I think there is some confusion. The promotion committee is a voluntary body, and the local authorities are, of course, the responsible


bodies. It is from them I am awaiting the case.

MOTOR VEHICLES (SAFETY GLASS).

Mr. DAY: asked the Minister of Transport whether, in view of the number of accidents that have recently happened to taximeter-cabs and public service vehicles, he will consider advising all licensing authorities to make it a condition of licensing such vehicles that they be fitted with safety glass and also carry an equipment of first-aid outfits?

Mr. HORE-BE,LISHA: All motor vehicles registered since 1931 are required to be fitted with safety glass to the front (except the top windows of double-decked buses). All public service vehicles used as express or contract carriages are required to carry first-aid equipment.

PEDESTRIANS (CROSSING-PLACES).

Mr. LEWIS: asked the Minister of Transport whether, having regard to the number of accidents resulting in death or injury to pedestrians in our large towns, he will consider the advisability of adopting the American system of compulsory crossings with appropriate penalties for those who neglect to use them?

Mr. HORE-BELISHA: I considered this question from the point of view of its practicability, but the difficulties in the way of drafting an adequate legal requirement to meet the situation generally cannot be ignored. I have asked highway authorities in London to provide guard rails which on appropriate roads would connect the spaces between the crossings in such a way as to impose a physical barrier. The House will be interested to note that despite the absence of compulsion in the use of the crossings, there has been since their establishment a great reduction in pedestrian casualties, the decline this year up to 20th June being 2½ per cent. in the number of pedestrians injured and nearly 9 per cent. in the number of pedestrians killed. I would appeal to all classes of road users invariably to respect the purpose of the crossings.

Sir GIFFORD FOX: Does the right hon. Gentleman not think that if he had power to compel pedestrians to use these

crossings the number of accidents would be materially reduced?

Mr. HORE-BELISHA: I have said that whatever one's intentions may be, there are obvious difficulties in framing regulations in effective legal form.

Sir G. FOX: Does the right hon. Gentleman not think that his Department should be able to frame such regulations?

Mr. HORE-BELISHA: I can only say that there are obvious difficulties.

DARDANELLES.

Mr. H. G. WILLIAMS: asked the Prime Minister whether arrangements will be made for a Debate to take place before the ratification of the proposed agreement for the re-militarisation of the Dardanelles?

Sir J. SIMON: My hon. Friend will realise that the Montreux Conference is still in progress. If at the appropriate stage there is evidence of a general desire for a Debate, I suggest that discussions should take place through the usual channels.

Oral Answers to Questions — DEFENCE.

WORKS (AEROPLANE FRAMES AND ENGINES).

Mr. HARDIE: asked the Minister for the Co-ordination of Defence whether the building of the works for frames and engines for aeroplanes has begun?

The MINISTER for the CO-ORDINATION of DEFENCE (Sir Thomas Inskip): The firms who are undertaking the production of frames and engines are themselves engaged upon the preparation of the necessary plans and designs for the building of the works. I am informed that good progress has been made, and that building will be commenced at an early date.

Mr. HARDIE: Referring to the statement made by the right hon. Gentleman on 29th May at that Box, that everything that was to be done in connection with what he spoke of then was to come before this House before any real start was made with any kind of work, what has he to say now, when he says that that work is being carried on instead of being brought here first for the approval of this House?

Sir T. INSKIP: I see no inconsistency between what is happening and what I said.

Mr. HARDIE: Is the right hon. Gentleman aware that his statement on 29th May has one result already, as was pointed out that afternoon, that already Handley-Page shares have increased nine times, according to this morning's returns, and that this is part of the grant that he is responsible for instituting'

STORES AND LAND.

Mr. HARDIE: asked the Minister for the Co-ordination of Defence whether he has, since taking his present post, given out any orders for material on work of any kind; and whether he has given his sanction for the purchase of any land?

Sir T. INSKIP: No, Sir. My duties, as defined in the White Paper, do not include the placing of orders for stores or the purchase of land. These remain the province of the Defence Departments and are dealt with through the appropriate organisations of those Departments.

Mr. HARDIE: Again referring to the right hon. Gentleman's statement on 29th May, when he said that Rootes' Properties were to be the source through which things must go, what does he mean today, seeing that Rootes' Properties are nothing but a financial corporation
Will the right hon. Gentleman say to this House now that what he said on 29th May was true, or is he prepared to contradict that statement and say it was wrong?

FOOD SUPPLIES.

Mr. BOOTHBY: asked the Minister for the Co-ordination of Defence what steps he is taking to ensure the provision of adequate food supplies in the event of war; and whether any special machinery of Government has been set up to co-ordinate information and policy in regard to this matter?

Sir T. INSKIP: My hon. Friend is aware that a special sub-committee of the Committee of Imperial Defence has been set up to examine all aspects of our food supplies in the event of war. This committee is engaged upon the work to which the second part of my hon. Friend's question refers.

Mr. BOOTHBY: Can my right hon. Friend say who is the chairman of this committee

Sir T. INSKIP: No, Sir. This is a sub-committee of the Committee of Imperial Defence, and the constitution of such committees is not revealed.

Mr. LAMBERT: Can my right hon. Friend say when the conclusions of this committee will be submitted to the House?

Sir T. INSKIP: No, Sir. The committee is engaged upon the examination of the facts at present, and I can only say that conclusions will be reached as soon as is consistent with the magnitude of the question.

Mr. LAMBERT: Can we have any information as to the conclusions?

Sir T. INSKIP: I hope so, some day.

Mr. SANDYS: Have any steps yet been taken to fill the existing granaries to their full capacity?

Sir T. INSKIP: That is another question. If my hon. Friend means, Are they now full to their complete capacity? the answer is in the negative.

Mr. SANDYS: Are steps being taken to fill them?

Sir T. INSKIP: The question of the storage of grain is one of the questions which is being considered by the committee.

Mr. GALLACHER: Arising out of these answers, taken in conjunction with the fact that all authorities agree that war means the end of civilisation, is there any sense in storing up food in that way?

Mr. BOOTHBY: asked the Minister for the Co-ordination of Defence whether, in considering the question of food supplies from the point of view of national defence, he is directing attention to the fishing industry; and whether he proposes to take any steps to ensure that the fishing fleets shall be adequate for all emergencies?

Sir T. INSKIP: The questions now under consideration with regard to food supplies in time of war necessarily cover the supply of fish, and the adequacy of the fishing fleets in this connection will, come under review.

Mr. BOOTHBY: Will it come under review by the sub-committee to which my right hon. Friend referred on the last question?

Sir T. INSKIP: Yes, Sir.

Lieut.-Commander TUFNELL: asked the Minister for the Co-ordination of Defence whether, in view of the vulnerability of London in regard to receiving supplies during the War, the necessity of keeping the city supplied with food, and the greater risk to railways than to roads through aeroplane attack, he will consider formulating a scheme for organising or planning the adequate provision of roads for conveying supplies from the West Coast or other less exposed ports to the Metropolis?

Sir T. INSKIP: As I indicated in my reply to the hon. and gallant Member for Cleveland (Commander Bower) on 17th June, a special committee is dealing with the whole question of the diversion of imports, their reception at alternative ports, and distribution therefrom. This task includes an examination of the capacity of all means of internal transport. The needs of the London area will be borne in mind. The object is to have adequate plans in readiness for any emergency.

Miss WILKINSON: Has the right hon. Gentleman a sub-committee working on the possible date of the next. war?

CONTRACTS (BARNSLEY).

Mr. POTTS: asked the Minister for the Co-ordination of Defence whether he has considered the letter of the Barnsley and District Chamber of Commerce intimating that works, foundries, etc., already situated within the county borough desire an opportunity to contract for Air Ministry, Admiralty and War Office equipment, clothing, shells, gas masks, aeroplane parts, etc., and that Barnsley has the highest unemployment in the West Riding in proportion to population; and will he take into immediate consideration Barnsley's claim to a proportional share of existing or future Government contracts?

Sir T. INSKIP: Yes, Sir. The method approved for carrying out the defence programme is that of contracts between the Service Departments and individual firms judged suitable for supplying the various classes of stores, so

far as these are required within the limits of the programme. Firms in Barnsley desiring an opportunity of contracting for Defence Services' requirements should therefore communicate with the Directors of Contracts of the Service Departments, and should state the class of material they are in a position to supply.

Oral Answers to Questions — ELECTRICITY SUPPLY.

SIR HARRY MCGOWAN'S COMMITTEE (REPORT).

Mr. EDE: asked the Minister of Transport what action he proposes to take on the report of Sir Harry McGowan's Committee; and when he proposes to take it?

Mr. HORE-BELISHA: The report has been too recently received to warrant the answers required.

Mr. EDE: Can the right hon. Gentleman give any indication as to when it will be advisable to put a question down again in order to get a complete answer?

Mr. HORE-BELISHA: Not for a considerable period, but I will try and remember to inform the hon. Member when to put down a further question.

Mr. KIRKWOOD: Have the Government any intention, in view of the report on the reorganisation of the transport of this country, of nationalising the transport of this country?

Mr. HORE-BELISHA: This question relates to electricity.

Mr. KIRKWOOD: I know perfectly well that it relates to electricity, but the two are combined one with the other.

CHARGES (GRAMPIAN ELECTRICITY SUPPLY COMFANY).

Captain RAMSAY: asked the Minister of Transport (1) whether he is aware that the Grampian Electricity Supply Company and other similar companies operating in Great Britain not only charge 8d. a unit, but insist on long-term contracts; and, in view of the fact that producers of electrical power from water claim to produce this power at a cost of less than ld. per unit, will he have the matter examined with the view to deciding whether the public is being charged exorbitant rates;


(2) whether he is aware that Section 17 of the Grampian Electricity Acts 1924, lays it down that current shall be supplied to the County of Angus at a reasonable rate; and, seeing that this agreement was made in return for substantial concessions in rates by the county council, will he take steps to have the present charges reduced so as to be in conformity with this agreement?

Mr. HORE-BELISHA: The Grampian Company's Act of 1922 prescribes the maximum charges which may be made by the company and also the terms and conditions under which consumers are entitled to obtain a supply. If the local authority of any district within the area or an appropriate number of consumers consider the charges excessive, provision is made.

Captain RAMSAY: May I ask my right hon. Friend, in the first place, whether he is satisfied that the county receives a supply at a suitable charge in comparison with the charge made to the General Commissioners for the grid; and, in the second place, whether he has taken any steps to inquire whether the charge of 8d. per unit is a fair addition to make, in view of the fact that the cost of production, on their own showing, is under ld. per unit?

Mr. HORE-BELISHA: My hon. and gallant Friend will bear in mind that the charge covers not only generation, but distribution over a wide area. As to whether it is too great a charge, it is not for me to decide offhand, but only upon representations in the prescribed manner made to me by local authorities or consumers, and I have had no such representations made to me.

Mr. HARDIE: Is it not a fact that when the power was given to the Grampian Company one of the conditions was that they would be able to get power at a reasonable rate, which was calculated at 4½d. or 5d.?

Mr. HORE-BELISHA: I do not know what was in the mind of Parliament in 1922. The procedure is as laid down.

PRODUCTION FROM COAL.

Captain RAMSAY: asked the Minister of Transport, in view of the fact that Switzerland and Norway import coal

for the generation of electricity although plenty of water power is available, and that the price of Scottish coal imported into the Irish Free State has been advanced by 2s. per ton at the request of the promoters of the Shannon electricity works in order to permit them to compete in power production with power produced from this coal, will he state how costs of production of power from coal in Great Britain compare with corresponding costs in the aforementioned countries?

Mr. HORE-BELISHA: The Electricity Commissioners inform me that sufficient data are not available upon which to base a reliable comparison.

Captain RAMSAY: In view of the fact that there seems to be ample evidence that all these countries can produce power more cheaply by coal, and imported coal at that, will my right hon. Friend have inquiries made to see, in the first place, whether we are behind other countries in the production of power from coal, and, if not, whether proper encouragement will be given to companies producing power from coal in Great Britain?

Mr. HORE-BELISHA: I shall be glad to send any information I may receive of possible interest to my hon. and gallant Friend in regard to the points mentioned by him.

HIGH COURT OF JUSTICE (OFFICIAL SHORTHAND WRITERS).

Mr. DOBBIE: asked the Attorney-General whether any decision has been taken on the subject of setting up a system of official shorthand writing in the High Court of Justice; whether the committee presided over by Mr. Justice Atkinson has concluded its deliberations on the subject; and whether he can make any statement as to the general lines on which this subject is to be handled by the judicial authorities?

The SOLICITOR - GENERAL (Sir Terence O'Connor): I understand that the committee presided over by Mr. Justice Atkinson hopes to present its report at an early date. It would be premature to reach any decision or make any statement upon the matter until the report has been received.

SCHOOL CHILDREN, SCOTLAND (FREE MEALS).

Mr. KIRKWOOD: asked the Secretary of State for Scotland how many education authorities in Scotland were providing free meals, other than milk meals, to elementary school children in March, 1934, March, 1935, and March, 1936, and the number of children receiving such meals at these periods?

The UNDER-SECRETARY of STATE for SCOTLAND (Lieut.-Colonel Colville): Seventeen of the 35 education authorities in Scotland provided free meals for children attending schools conducted under the Code of Regulations for Day Schools in March, 1934, March, 1935, and March, 1936. The number of children receiving free meals at the respective dates was 18,772, 18,371 and 20,859.

Mr. KIRKWOOD: Seeing that the report of Sir John Orr, who is recognised as an expert on nutrition, which has been submitted to the country generally, states that half the population of the country have not sufficient income to enable them to live a decent healthy life, will the Minister take steps to see that the children receive greater attention in school than they receive at the present time?

Lieut.-Colonel COLVILLE: Education authorities are aware of the powers which Parliament has given them in this regard.

The following table shows the approximate quantity and value of cotton piece-goods and beef produced in the United Kingdom in 1924 and 1934:

—
Year.
Quantity.
Value.








Mill. sq. yds.
£ Mill.


Cotton piece goods
…
…
…
…
1924 (a)
6,026
191·5 (b)







1934
3,462
67·2 (b)








Thous. tons.



Beef and veal (c)
…
…
…
…

602
53·0 (d)







1934
674
37·7 (d)


(a) Including some mixed cotton and artificial silk fabrics.


(b) Valued as finished for sale.


(c) Including edible offal, but not production from imported fat cattle.


(d) Valued at England and Wales prices.

ARGENTINA.

Mr. DODD: asked the President of the Board of Trade whether he is aware that the Lancashire cotton trade organisations are strongly in favour of renewing and, where necessary, improving the trade agreement with the Argentine; and will he give them an opportunity of stating their views before any decision is taken which may adversely

Mr. JOHNSTON: Will the right hon. and gallant Gentleman cause inquiries to be made as to the result of the great experiment in the Free State whereby children are supplied with one hot meal per day, and will he let the House know what the result has been on the physical condition of the children?

Lieut.-Colonel COLVILLE: Perhaps the right hon. Gentleman will make that a separate question.

Oral Answers to Questions — TRADE AND COMMERCE.

COTTON PIECE GOODS AND BEEF (PRODUCTION).

Mr. DODD: asked the President of the Board of Trade the figures of production of cotton-piece goods in the United Kingdom in 1924 and 1934, together with figures of the United Kingdom production of beef in the same years?

The PRESIDENT of the BOARD of TRADE (Mr. Runciman): As the answer includes a table of figures, I will, with my hon. Friend's permission; circulate it in the OFFICIAL REPORT.

Following is the answer:

affect the British cotton export trade to the Argentine?

Mr. RUNCIMAN: The answer to the first part of the question is in the affirmative. As regards the second part, I am already in possession of the views of the cotton industry, and it is always open to them to make any further representations.

Sir JOSEPH LAMB: Were those views given from the industry direct or through some other body, and will my right hon. Friend give the same facilities to agriculture to put their case before him?

Mr. RUNCIMAN: I am ready to hear from agriculturists or others any views they have to express.

Sir J. LAMB: Is it not a fact that my right hon. Friend refused to accept information from agriculturists direct, and said it must come through some other Department?

Mr. RUNCIMAN: No, not at all.

Captain DOWER: We were told two days ago that the main features of the agreement would be given in a fortnight's time. Shall we have an opportunity of discusing them on that occasion, or must we wait until the agreement is put before us, as has happened so often before, and have to take it or leave it?

Mr. RUNCIMAN: Perhaps my hon. and gallant Friend had better put a question on the Paper on that subject as it refers to the business of the House.

Brigadier-General Sir HENRY CROFT: asked the President of the Board of Trade whether he can now intimate that the Argentine agreement will be such as to give a definite opportunity for the maintenance and expansion of home and Dominion production of beef?

Mr. H. G. WILLIAMS: asked the President of the Board of Trade whether it is proposed to denounce the Anglo-Argentine Trade Agreement on or before 7th July?

Mr. LEVY: asked the President of the Board of Trade whether he has any statement to make in respect of the negotiations for the revision of the Anglo-Argentine Trade Agreement?

Mr. RUNG IMAN: The negotiations are still proceeding, and therefore I am not yet in a position to make any statement.

Mr. H. G. WILLIAMS: Will my right hon. Friend assure us that 7th July will not be permitted to come without definite action being taken?

EXPORTS AND IMPORTS (AUSTRALIA AND ARGENTINA).

Sir H. CROFT: asked the President of the Board of Trade the value of exports

and imports during the last completed 12 months for which information is available between Great Britain and Australia and Great Britain and the Argentine, respectively?

Mr. RUNCIMAN: The total declared value of merchandise imported into the United Kingdom during the 12 months ended March, 1936, and consigned from Australia was £56,138,000 and of exports to Australia £30,415,000, including re-exports valued at £715,000. The corresponding figures of United Kingdom trade with the Argentine Republic are £43,680,000 for imports and £15,891,000 for exports, including re-exports valued at £314,000.

Sir H. CROFT: Since these figures indicate that the trade with Australia is more important than the trade with the Argentine, will my right hon. Friend take that matter into consideration in the decision he is about to make; and will he inform the House whether the invisible trade with Australia is not also more valuable than that with the Argentine?

Mr. DODD: Is it not advisable to take into consideration also the invisible exports?

Sir EDMUND FINDLAY: Can we have an assurance from the President of the Board of Trade that the interests of the agricultural community are regarded as far more important than the financial and vested interests of London?

Mr. RUNCIMAN: We have throughout these negotiations borne in mind the relative importance of the various industries.

AUSTRALIA AND JAPAN.

Sir H. CROFT: asked the President of the Board of Trade whether his attention has been called to the Japanese economic threat to Australia; and whether he will bear in mind the growing trade of British textiles in Australia and take all possible steps to reciprocate the preference granted by Australia to British goods in view of the Japanese action?

Mr. RUNCIMAN: As regards the first part of the question, I understand that in connection with trade measures recently introduced by the Commonwealth Government, the Japanese Government


are taking certain steps affecting imports from Australia. As I said on 26th May, I recognise that the action which the Commonwealth Government have taken in regard to textiles should be of substantial benefit to United Kingdom trade. The Ottawa Agreement with Australia provided mutual trade advantages for Australia and this country, and the possibilities of further developing trade between the two countries are constantly in mind.

Sir H. CROFT: Can my right hon. Friend answer the question whether they will in fact be embodied in the Argentine Agreement?

Mr. RUNCIMAN: I am afraid that I cannot at the present time.

Sir P. HARRIS: Does not the right hon. Gentleman think it is advisable in any action he may take to break the atmosphere that trade is economic war, and recognise that trade is the mutual interest of all the countries concerned?

Mr. E. J. WILLIAMS: Will the right hon. Gentleman bear in mind the effect of the Argentine Agreement on the South Wales coal trade?

MERCANTILE MARINE (MANNING AND STEERING).

Mr. EDE: asked the President of the Board of Trade whether he has yet received the reports of the appropriate committees on the draft revised manning and steering regulations; and, if not, when he expects to receive them?

Mr. RUNCIMAN: I received the final report of the Steering Gear Committee on 29th June. As regards manning, I understand that the Merchant Shipping Advisory Committee are at present considering the terms of a report supplementing and amending some of the proposals contained in their report of 13th February last. I hope to receive this further report very shortly.

Mr. EDE: Is it possible that these regulations will be published before the Recess?

Mr. RUNCIMAN: I cannot say on what precise date they will be published, but we are hurrying them up.

Mr. MARKHAM: Will the right hon. Gentleman say what "very shortly" means, because a month ago we were told it would he very shortly?

NATIONAL HEALTH INSURANCE.

Mr. SUTCLIFFE: asked the Minister of Health whether the Government propose to introduce legislation to extend the benefits of national health insurance to young persons on leaving school, in order to close the existing gap between that age and the age of 16?

The MINISTER of HEALTH (Sir Kingsley Wood): As I stated in the House on 10th December, I hope to introduce legislation at the earliest convenient opportunity to cover the gap in the provision for the medical supervision of boys and girls between the school-leaving age and the age of entry into full insurance under the National Health Insurance Scheme.

Mr. SUTCLIFFE: Can my right hon. Friend say what he means by "convenient opportunity"?

Sir K. WOOD: That depends on Parliamentary time.

Mr. LOGAN: Is entry into insurance to be on a contributory basis and, if so, at what rate?

Sir K. WOOD: Perhaps the hon. Gentleman will wait.

Oral Answers to Questions — HOUSING.

AGED PERSONS.

Mr. DAVID ADAMS: asked the Minister of Health whether he is aware that there is an increasing demand in many parts of England and Wales for small dwellings of a type suitable for occupation by aged persons; and whether he can give the House any information as to the current activities of local authorities in regard to the provision of such dwellings?

Sir K. WOOD: I agree that the demand for small houses and tenements suitable for aged persons appears to be increasing. As regards the second part of the question, I would refer the hon. Member to the reply which I gave to a similar question by the hon. Member for


Clay Cross (Mr. Holland) on 25th May last. Up to yesterday the total number of such houses approved by me was 17,267, and at that date proposals to erect a further 897 were under consideration.

Mr. THURTLE: Is the right hon. Gentleman satisfied with the present position in regard to this matter?

Sir K. WOOD: No, I would like to see further improvements made, and I have communicated with the local authorities to that effect.

Lieut.-Colonel MOORE: Is not the shortage of this small type of dwelling due to the fact that in the 1930 Act the Socialists deliberately took action to encourage the increased building of larger dwellings at the expense of the smaller houses?

Mr. JOHNSTON: Is that not a, deliberate perversion of the facts?

SITE CLEARANCE.

DAVID ADAMS: asked the Minister of Health what steps local authorities may, with the approval of his Department, take to require not only the demolition of insanitary buildings, but also the clearance of a site which has been the subject of a clearance order under Section 2 of the Housing Act, 1930?

Sir K. WOOD: The Housing Act, 1930, does not contain any provision to enable local authorities to require the clearance of a site which has been the subject of a clearance order. Local authorities have power themselves to demolish the buildings on default of the owner and may proceed under the Public Health Acts where the condition of an uncleared site of demolished buildings amounts to a nuisance.

Mr. ADAMS: Does not the Minister consider it desirable that local authorities should have powers to clear such sites when they are manifestly objectionable from the aesthetic point of view?

Sir K. WOOD: I understand this matter was considered when the last Housing Act was before the House, and it was left to the free vote of the House, and the decision which I have stated was taken.

MALNUTRITION.

Mr. SANDYS: asked the Minister of Health to what extent his inquiries have established the existence of malnutrition in the United Kingdom?

Sir K. WOOD: So far as England and Wales are concerned, I would refer my hon. Friend to the recent annual reports of the Chief Medical Officer of my Department and of the Board of Education. As regards Scotland, perhaps my bon. Friend will address a question to the Secretary of State.

Mr. SANDYS: Can my right hon. Friend tell us clearly whether the Government accept the view that malnutrition does exist on a considerable scale, and also whether the Government regard the maintenance of a healthy standard of feeding as a national responsibility?

Sir K. WOOD: That is a question which I should like to see on the Paper; and I should also like to see a good definition of malnutrition.

SURPLUS FOOD SUPPLIES (UNEMPLOYED PERSONS).

Captain MACNAMARA: asked the Minister of Health whether, in view of the success of the Bishop Auckland potato scheme, it is proposed to institute similar schemes to make milk, vegetables, eggs, fish, meat, and other nutritious foodstuffs available at reduced rates to the unemployed?

Sir K. WOOD: I would refer my hon. and gallant Friend to the reply given by the Prime Minister on this subject on 23rd March to the right hon. Member for Stirling and Clackmannan (Mr. Johnston) of which I am sending him a copy.

Mr. JOHNSTON: Is the right hon. Gentleman aware that the answer given in March last said merely that he was having inquiries made? Can we now be informed of the result of those inquiries?

Sir K. WOOD: I think the right hon. Gentleman must be under a misapprehension. I will send him a copy of the reply.

Mr. SANDYS: Does the right hon. Gentleman recognise that the Bishop Auckland scheme proved a great success and doubled the consumption of potatoes?

SECONDARY SCHOOLS (DONCASTER CHILDREN).

Mr. SHORT: asked the President of the Board of Education whether he is aware that many Doncaster children have to attend secondary schools situated outside Doncaster; to what extent this is due to a proportion of places being allocated to the West Riding council; and will he urge the council to provide adequate accommodation for its own students?

The PRESIDENT of the BOARD of EDUCATION (Mr. Oliver Stanley): I am aware that a few Doncaster children are attending secondary schools outside Doncaster, but I am not aware of the circumstances in which they are doing so. The board have already approved plans for a now secondary school to be provided by the West Riding authority at Adwick-le-Street, on completion of which it is anticipated that there will be a very considerable reduction in the number of pupils from the West Riding area attending the secondary schools in Doncaster.

Oral Answers to Questions — SOUTHERN RHODESIA.

NATIVE PRISONERS.

Mr. CREECH JONES: asked the Secretary of State for Dominion Affairs how many of the 19,737 natives of Southern Rhodesia who were convicted under the laws passed in the year 1935 were sentenced to imprisonment; and whether the prison accommodation has been increased since 1923 or, if not, what arrangement is made for the increase in the number of prisoners?

The SECRETARY of STATE for DOMINION AFFAIRS (Mr. Malcolm MacDonald): I have no information as to how many of the natives who were convicted under the pass Laws in 1935 were sentenced to imprisonment, but am making inquiries. The reply to the second part of the question is in the affirmative.

Mr. CREECH JONES: Is the right hon. Gentleman aware that the new Registration Bill will have the effect of largely increasing the prison population?

Mr. MacDONALD: I am rather inclined to think it may have the opposite effect.

CONSTITUTION

Mr. LUNN: asked the Secretary of Stae for Dominion Affairs what are the reasons for the proposed alteration of the Southern Rhodesian constitution eliminating the powers of His Majesty's High Commissioner from the constitutional letters patent and from all Southern Rhodesian legislation; what these powers are; and which of such powers are to be transferred to the Secretary of State?

Mr. M. MacDONALD: Arrangements are being made for the issue next week of a Command Paper containing a despatch from the Governor of Southern Rhodesia which explains the proposals fully.

Mr. LUNN: Will the right hon. Gentleman assert himself as Secretary of State for Dominion Affairs and see that we do not give away cur powers of trusteeship for the interests of the natives in those territories?

Mr. MacDONALD: If the hon. Member will await the Command Paper he will see that we are not giving away our powers.

IRISH FREE STATE.

Mr. SHINWELL: asked the Secretary of State for Dominion Affairs whether negotiations for a settlement of outstanding difficulties are proceeding between His Majesty's Government and the Government of the Irish Free State; what subjects are under discussion; and whether there is any prospect of an early settlement?

Mr. M. MacDONALD: The answer to the first part of the question is in the negative; the other parts of the question do not therefore arise.

Mr. SHINWELL: Do I understand that no negotiations of any sort or kind are now proceeding on any question between this Government and the Irish Free State Government?

Mr. MacDONALD: If the hon. Member will read my answer he will see that no negotiations are proceeding on outstanding difficulties.

Mr. SHINWELL: Have no questions arisen of late between the Irish Free State Government and His Majesty's Government?

Mr. MacDONALD: There are some minor matters on which we are in negotiation, but the hon. Member's question referred to outstanding difficulties.

BEDWAS COLLIERY, MONMOUTH-SHIRE.

Mr. JENKINS: asked the Secretary for Mines whether the workmen's insurance scheme now in operation at the Bedwas colliery, Monmouthshire, is financed entirely, or to what extent, by contributions from workmen's wages; and can he supply full particulars as to the contributions, benefits, reserve funds, and management of the scheme?

The SECRETARY for MINES (Captain Crookshank): I would refer the hon. Member to the reply I gave to the hon. Member for Rhondda, West (Mr. John) yesterday, to which I have nothing to add.

TELEPHONE SERVICE, BELFAST (OVERTIME).

Mr. VIANT: asked the Postmaster-General the extent to which overtime has been worked at Telephone House, Belfast, giving the period, the number of persons involved, the number of hours worked, and the extra cost incurred; and by what number has the staff been increased in order that such overtime shall cease?

The ASSISTANT POSTMASTER-GENERAL (Sir Walter Womersley): I regret that I am not at present in possession of all the detailed information desired by the hon. Member, but it is being obtained and I will let him have it as soon as possible.

CINEMATOGRAPH FUND.

Mrs. TATE: asked the Lord President of the Council what sum of money has been contributed from the Sunday

opening of cinemas to the Cinematograph Fund; and upon what the money has been spent?

The LORD PRESIDENT of the COUNCIL (Mr. Ramsay MacDonald): The amount paid into the Cinematograph Fund to date is £6d. Grants amounting in all to £18,000 have been made to the British Film. Institute. No other payments from the fund have been made other than those necessary to meet the expenses of administration.

Mrs. TATE: In view of the fact that these sums of money for the so-called improvement of films were taken from sums of money formerly given to voluntary hospitals, is the right hon. Gentleman satisfied that the number of people who have been improved has justified the experiment?

BUSINESS OF THE HOUSE.

Mr. ATTLEE: May I ask the Leader of the House what business he proposes to take in the event of the Motion standing in the name of the Prime Minister being carried?

Sir J. SIMON: In view of the progress made yesterday with the Finance Bill, we have every hope of concluding the Report stage by about half-past seven to-night. We shall then move the Second Reading of the Malta (Letters Patent) Bill, which has come from the Lords, and afterwards take the Third Reading of the Air Navigation Bill. In any event, we must conclude the Report stage of the Finance Bill and obtain the Third Reading of the Air Navigation Bill to-night, and I hope we may carry through the programme we have suggested.
Motion made, and Question put,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[Sir J. Simon.]

The House divided: Ayes, 208; Noes, 122.

Division No. 262.]
AYES.
[3.49 p.m.


Acland-Troyte, Lt.-Col. G. J.
Barclay-Harvey, Sir C. M.
Boulton, W. W.


Albery, Sir I. J.
Baxter, A. Beverley
Briscoe, Capt. R. G.


Anstruther-Gray, W. J.
Beaumont, Hon. R. E. B. (Portsm'h)
Brocklebank, C. E. R.


Apsley, Lord
Beit, Sir A. L.
Brown, Col. D. C. (Hexham)


Assheton, R.
Bennett, Capt. Sir E. N.
Brown, Rt. Hon. E. (Leith)


Astor, Major Hon. J. J. (Dover)
Birchall, Sir J. D.
Browne, A. C. (Belfast, W.)


Astor, Hon. W. W. (Fulham, E.)
Blaira, Sir R.
Bull, B. B.


Balfour, Capt. H. H. (Isle of Thanet)
Blindell, Sir J.
Bullock, Capt. M.


Balniel, Lord
Bossom, A. C.
Burgin, Dr. E. L.




Campbell, Sir E. T.
Hepworth, J.
O'Connor, Sir Terence J.


Castlereagh, Viscount
Herbert, Major J. A. (Monmouth)
Ormsby-Gore, Rt. Hon. W. G.


Cayzer, Sir C. W. (City of Chester)
Herbert, Capt. Sir S. (Abbey)
Palmer, G. E. H.


Cayzer, Sir H. R. (Portsmouth, S.)
Hills, Major Rt. Hon. J. W. (Ripon)
Peake, O.


Chamberlain, Rt. Hn. Sir A. (Br.W.)
Holdsworth, H.
Peat, C. U.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Holmes, J. S.
Petherick, M.


Channon, H.
Hope, Captain Hon. A. O. J.
Pickthorn, K. W. M.


Chapman, A. (Rutherglen)
Hore-Belisha, Rt. Hon. L.
Pilkington, R.


Chapman, Sir S. (Edinburgh, S.)
Horsbrugh, Florence
Porritt, R. W.


Colfax, Major W. P.
Howitt, Dr. A. B.
Pownall, Sir Assheton


Collins, Rt. Hon. Sir G. P.
Hudson, Capt. A. U. M. (Hack., N.)
Purbrick, R.


Colville, Lt.-Col. Rt. Hon. D. J.
Hunter, T.
Radford, E. A.


Cooke, J. D. (Hammersmith, S.)
Inskip, Rt. Hon. Sir T. W. H.
Ramsay, Captain A. H. M.


Cooper, Rt. Hn. A. Duff(W'st'r S.G'gs)
Jackson, Sir H.
Rankin, R.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Jarvis, Sir J. J.
Rathbone, Eleanor (English Univ's.)


Cranborne, Viscount
Jones, L. (Swansea, W.)
Rawson, Sir Cooper


Croft, Brig.-Gen. Sir H. Page
Keeling, E. H.
Reed, A. C. (Exeter)


Crooke, J. S.
Kerr, Colonel C. I. (Montrose)
Rickards, G. W. (Skipton)


Crookshank, Capt. H. F. C.
Kerr, H. W. (Oldham)
Robinson, J. R. (Blackpool)


Croom-Johnson, R. P.
Kerr, J. Graham (Scottish Univs.)
Ruggles-Brise, Colonel Sir E. A.


Cross, R. H.
Kimball, L.
Runciman, Rt. Hon. W.


Crossley, A. C.
Kirkpatrick, W. M.
Samuel, M. R. A. (Putney)


Crowder, J. F. E.
Lamb, Sir J. Q.
Sanderson, Sir F. B.


Cruddas, Col. B.
Lambert, Rt. Hon. G.
Sandys, E. D.


Davies, Major Sir G. F. (Yeovil)
Latham, Sir P.
Sassoon, Rt. Hon. Sir P.


De Chair, S. S.
Leckie, J. A.
Scott, Lord William


De la Bère, R.
Leech, Dr. J. W.
Shaw, Major P. S. (Wavertree)


Dodd, J. S.
Lees-Jones, J.
Shepperson, Sir E. W.


Dower, Capt. A. V. G.
Lennox-Boyd, A. T. L.
Simon, Fit. Hon. Sir J. A.


Duggan, H. J.
Levy, T.
Southby, Comdr. A. R. J.


Dunglass, Lord
Lewis, O.
Spens, W. P.


Ellis, Sir G.
Llewellin, Lieut.-Col. J. J.
Stanley, Rt. Hon. Lord (Fylde)


Elliston, G. S.
Lloyd, G. W.
Stanley, Rt. Hon. Oliver (W'm'I'd)


Emery, J. F.
Locker-Lampson, Comdr. O. S.
Storey, S.


Emmott, C. E. G. C.
Lovat-Fraser, J. A.
Stourton, Major Hon. J. J.


Emrys-Evans, P. V.
Mabane, W. (Huddersfield)
Strauss, E. A. (Southwark, N.)


Entwistle, C. F.
MacDonald Rt. Hn. J. R. (Scot. U.)
Strauss, H. G. (Norwich)


Errington, E.
MacDonald, Rt. Hon. M. (Ross)
Stuart, Hon. J. (Moray and Nairn)


Fildes, Sir H.
Macdonald. Capt. P. (Isle of Wight)
Sutcliffe, H.


Findlay, Sir E.
McEwen, Capt. J. H. F.
Tasker, Sir R. I.


Fox, Sir G. W. G.
McKie, J. H.
Tate, Mavis C.


Furness, S. N.
Maclay, Hon. J. P.
Taylor, Vice-Adm. E. A. (Padd., S.)


Goodman, Col. A. W.
Macnamara, Capt. J. R. J.
Tree, A. R. L. F.


Gower, Sir R. V.
Magnay, T.
Tryon, Major Rt. Hon. G. C.


Graham, Captain A. C. (Wirral)
Makins, Brig.-Gen. E.
Tufnell, Lieut.-Com. R. L.


Granville, E. L.
Manningham-Buller, Sir M.
Turton, R. H.


Grattan-Doyle, Sir N.
Margesson, Capt. Rt. Hon. H. D. R.
Walker-Smith, Sir J.


Gretton, Col. Rt. Hon. J.
Markham, S. F.
Ward, Irene (Wallsend)


Gridley, Sir A. B.
Mayhew, Lt.-Col. J.
Wardlaw-Milne, Sir J. S.


Grimston, R. V.
Mills, Sir F. (Leyton, E.)
Warrender Sir V.


Guinness, T. L. E. B.
Mills, Major J. D. (New Forest)
Waterhouse, Captain C.


Guy, J. C. M.
Mitchell, Sir W. Lane (Streatham)
Wayland, Sir W. A.


Hacking, Rt. Hon. D. H.
Moore, Lieut.-Col. T. C. R.
Williams, H. G. (Croydon, S.)


Hanbury, Sir C.
Moreing, A. C.
Windsor-Clive, Lieut.-Colonel G.


Hannah, I. C.
Morris-Jones, Dr. J. H.
Wise, A. R.


Hannon, Sir P. J. H.
Morrison, G. A. (Scottish Univ's.)
Withers, Sir J. J.


Harbord, A.
Morrison, W. S. (Cirencester)
Womersley, Sir W. J.


Haslam, Sir J. (Bolton)
Muirhead, Lt.-Col. A. J.
Wood, Rt. Hon. Sir Kingsley


Heilgers, Captain F. F. A.
Munro, P.



Heneage, Lieut.-Colonel A. P.
Neven-Spence, Maj. B. H. H.
TELLERS FOR THE AYES.


Hepburn, P. G. T. Buchan-
Nicolson, Hon. H. G.
Sir George Penny and Lieut.-




Colonel Sir A. Lambert Ward.




NOES.


Acland, R. T. D. (Barnstaple)
Dalton, H.
Griffiths, J. (Llanelly)


Adams, D. (Consett)
Davies, D. L. (Pontypridd)
Hall, G. H. (Aberdare)


Adams, D. M. (Poplar, S.)
Davies, R. J. (Westhoughton)
Hall, J. H. (Whitechapel)


Adamson, W. M.
Davies, S. O. (Merthyr)
Hardie, G. D.


Alexander, Rt. Hon. A. V. (H'Isbr.)
Day, H.
Harris, Sir P. A.


Attlee, Rt. Hon. C. R.
Dobbie, W.
Henderson, A. (Kingswinford)


Bonfield, J. W.
Dunn, E. (Rother Valley)
Henderson, J. (Ardwick)


Barnes, A. J.
Ede, J. C.
Henderson, T. (Tradeston)


Barr, J.
Edwards, Sir C. (Bedwellty)
Hills, A. (Pontefract)


Batey, J.
Fletcher, Lt.-Comdr. R. T. H.
Holland, A.


Benson, G.
Foot, D. M.
Jagger, J.


Bromfield, W.
Frankel, D.
Jenkins, A. (Pontypool)


Brown, Rt. Hon. J. (S. Ayrshire)
Gallacher, W.
John, W.


Burke, W. A.
Gardner, B. W.
Johnston, Rt. Hon. T.


Cape, T.
George, Megan Lloyd (Anglesey)
Jones, A. C. (Shipley)


Cassells, T.
Graham, D. M. (Hamilton)
Jones, Morgan (Caerphilly)


Chater, D.
Green, W. H. (Deptford)
Kelly, W. T.


Cluse, W. S.
Greenwood, Rt. Hon. A.
Kennedy, Rt. Hon. T.


Clynes, Rt. Hon. J. R.
Grenfell, D. R.
Kirby, B. V.


Cove, W. G.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Kirkwood, D.


Daggar, G.
Griffiths, G. A. (Hemsworth)
Lathan, G.







Lawson, J. J.
Parkinson, J. A.
Stephen, C.


Lee, F.
Pethick-Lawrence, F. W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Leonard, W.
Potts, J.
Taylor, R. J. (Morpeth)


Leslie, J. R.
Quibell, D. J. K.
Thurtle, E.


Logan, D. G.
Richards, R. (Wrexham)
Viant, S P.


Lunn, W.
Riley, B.
Walker, J.


McEntee, V. La T.
Roberts, W. (Cumberland, N.)
Watson, W. McL.


McGhee, H. G.
Robinson, W. A. (St. Helens)
Welsh, J. C.


MacLaren, A.
Rothschild, J. A. de
Westwood, J.


Maclean, N.
Rowson, G.
White, H. Graham


MacMillan, M. (Western Isles)
Salter, Dr. A.
Wilkinson, Ellen


Mainwaring, W. H.
Seely, Sir H. M.
Williams, D. (Swansea, E.)


Marklow, E.
Sexton, T. M.
Williams, E. J. (Ogmore)


Mathers, G.
Shinwell, E.
Williams, T. (Don Valley)


Maxton, J.
Short. A.
Wilson, C. H. (Aiterellffe)


Messer, F.
Simpson, F. B.
Woods, G. S. (Finsbury)


Montague, F.
Sinclair, Rt. Hon. Sir A. (C'thn's)
Young, Sir R. (Newton)


Muff, G.
Smith, Ben (Rotherhithe)



Naylor, T. E.
Smith, Rt. Hon. H. B. Lees- (K'ly)
TELLERS FOR THE NOES.


Paling, W.
Smith, T. (Normanton)
Mr. Whiteley and Mr. Groves.


Parker, J.
Sorensen, R. W.

CONSOLIDATION BILLS.

Report from the Joint Committee, with Minutes of Evidence, in respect of the Public Health (London) Bill [Lords] (pending in the Lords), brought up, and read.

Report to lie upon the Table, and to be printed.

MESSAGE FROM THE LORDS.

That they have agreed to,—

Cirencester Gas Bill, with an Amendment.

Colne Valley and Northwood Electricity Bill.

Brentford and Chiswick Corporation Bill, with Amendments.

That they have passed a Bill, intituled, "An Act to confirm, a Provisional Order of the Ministry of Health relating to the borough of West Hartlepool." [Ministry of Health Provisional Order Confirmation (West Hartlepool) Bill [Lords.]

Also a Bill, intituled, "An Act to confirm a Provisional Order of the Ministry of Health relating to the rural district of Plympton Saint Mary." [Ministry of Health Provisional Order Confirmation (Plympton Saint Mary) Bill [Lords.]

Also a Bill, intituled, "An Act to confirm a Provisional Order of the Ministry of Health relating to the borough of Barnsley." [Ministry of Health Provisional Order Confirmation (Barnsley) Bill [Lords.]

And also, a Bill, intituled, "An Act to confirm a Provisional Order of the Ministry of Health relating to the borough of St. Helens." [Ministry of Health Provisional Order Confirmation (St. Helens) Bill [Lords.]

Amendments to—

Fishguard and Goodwick Urban District Council Bill [Lords], without Amendment.

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (WEST HARTLEPOOL) BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 148.]

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (PLYMPTON SAINT MARY) BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 149.]

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (BARNSLEY) BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 150.]

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (ST. HELENS) BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 151.]

Orders of the Day — FINANCE BILL.

Order read for resuming Adjourned Debate on Amendment proposed [30th June] on Consideration of the Bill, as amended:

Which Amendment was, in Clause 18, page 12, line 25, after the word "shows," to insert the words "in writing or otherwise."—[Mr. Wells.]

Question again proposed, "That those words be there inserted in the Bill."

3.58 p.m.

Mr. SPENS: This Amendment arises out of a discussion which took place on the Committee stage as to the procedure to be adopted by the subject in bringing applications before the Special Commissioners, who have to be satisfied that the transfers referred to were not effected mainly for the purpose of avoiding liability to Income Tax. When we were discussing the point, I suggested that there might be difficulty with the machinery if every subject had to appear in person before the Commissioners, but my right hon. Friend said that he did not think that would be necessary in every case. These words are proposed to be put in, in order to make it plain that, in the first instance, the subject who desires to go before the Special Commissioners may make application in writing to the Commissioners.

3.58 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): On the Committee stage I said to my hon. and learned Friend that perhaps the difficulty which he anticipated was exaggerated, but that I would be very willing to look into the matter. My hon. and learned Friend has put down this Amendment, to which I see no objection, in order to make it clear that the matter referred to can be dealt with in writing. I have much pleasure in accepting the Amendment.
Amendment agreed to.

4.0 p.m.

Sir JOHN WARQLAW-MILNE: I beg to move, in page 12, line 28, at the end, to insert:
but where the Special Commissioners are satisfied that the transfer and any associated operation were affected substantially though

not mainly for some purpose other than the purpose of avoiding liability to taxation they shall have power to remit such proportion of the tax which would otherwise be chargeable as in their opinion is lust having regard to the circumstances of the case.
The object of the Amendment is to deal with the case in which there is a doubt as to whether or not a transfer has been made for the purpose of avoiding liability to taxation. As the Clause stands it may be very difficult for the Special Commissioners, or indeed for the right hon. Gentleman's own officials, to decide definitely whether a transfer has entirely been made for the purpose of avoiding taxation, and it may be, therefore, that in a case of doubt the officials concerned or the Special Commissioners may feel that they must come to a decision against the taxpayer. The object of the Amendment is to give them discretion in cases in which there is a doubt. No real harm can come from giving that discretion. It cannot but make the Clause operate more satisfactorily from the point of view of the Treasury, and more satisfactorily to the taxpayer.

Mr. CROOM-JOHNSON: I beg to second the Amendment.
I do so because of the presence of the word "mainly" in the proviso which appears on page 12, in line 24, and onwards.

4.2 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): It is clear from what my hon. Friend said in moving this Amendment that what he has in view is not the ordinary case. The transactions against which this Clause is designed are in the great majority of cases perfectly plain cases of tax evasion; they are gross and palpable efforts to avoid taxation. My hon. Friend mentioned, however, that there may be border-line cases, and it is his intention by the Amendment to deal with such cases by allowing the commissioners to apportion the amount of taxation which they think the individual should pay, having regard to the relative quantities. of avoidance and other motives in the transfer. It is very difficult to conceive such a proposal in operation. It, will be difficult to say in any case what is the precise proportion of avoidance and of other elements in the transaction.

Sir J. WARDLAW-MILNE: Is it not the case that the Chancellor of the Exchequer has in fact put that responsibility on the officials concerned under this Clause by the use of the word "mainly"?

Mr. MORRISON: No; that is precisely what we are not doing. By using the word "mainly" we are asking the Commissioners to decide a question of fact, namely, whether the transaction is one which has been entered into mainly for the purpose of tax avoidance. Once that result has been achieved, the other incidence of the Clause follows. That is a very different thing from casting upon the Special Commissioners further discrimination And asking them to say whether there is, for instance, 30 per cent. of proper purpose, and that therefore there should be 70 per cent. assessment. That would be a decision which it would be beyond the powers of any body of men, however able, to make. The word "mainly," as my hon. and learned Friend the Member for Bridgwater (Mr. Croom-Johnson) knows, is a word that frequently does appear, and is a word which has received a good deal of judicial interpretation in the past. I suggest that it is the proper word to use in this particular context.
We are taking the step of asking this body of men, the Special Commissioners, in whom every one has complete confidence, to look at a transaction as a whole, and to decide what is its true character as a, whole. The use of the word "mainly" enables them to come to a broad conclusion on a question of fact, which is essential. The difficulty of apportioning with anything like justice the degree of evasion present in any transaction makes me commend to the House the proposal of the Bill rather than that of the Amendment. It is a perfectly just proposition that, once you are satisfied that a transaction has been entered into mainly for the purpose of avoiding taxation, the income which the individual has the power to control should pay taxation. Amendments of this character rather suggest that some hon. Members are under the misapprehension that this is a penal Clause. It is nothing of the kind. We are merely saying here that if people have power to enjoy an income because of rights which

they have obtained by these transfers, they should pay taxation like any one else.

4.7 p.m.

Mr. H. G. WILLIAMS: Is not the Financial Secretary's explanation something like the explanations of what the words "genuinely seeking work" mean? You have really to examine the state of mind of the person concerned. Two individuals go through precisely the same financial motions. One is able to tell some skilful story and to satisfy the Commissioners that the transfer was done mainly for some reason other than tax avoidance, and therefore he is not taxed. The second man is not so skilful in telling the tale, and he is taxed. They may be two people whose circumstances are identical, and the one may be taxed far more heavily than the other. It seems to me that you are asking the Commissioners to do an impossible thing, to judge the state of mind of the person concerned in these transactions, which in one case may be honourable and in the other case not so honourable.

Sir J. WARDLAW-MILNE: I do not wish to press the Amendment: it is not worth while to take it to a Division. I think the Financial Secretary to the Treasury is very optimistic if he thinks he can achieve his object with the Clause as it stands.
Amendment, by leave, withdrawn.

4.9 p.m.

Mr. SPENS: I beg to move, in page 13, line 36, after "kind," to insert:
other than property or rights of any kind outside the United Kingdom on the twenty-second day of April, nineteen hundred and thirty-six, and not subsequently transferred inside the United Kingdom.
Quite frankly I move this Amendment for the purpose of keeping out of the net a certain type of transfer which I respectfully suggest ought not to be inside the net. When this Clause was first mentioned in the House and when it was discussed in Committee we were told that one of the essentials to bring a transaction inside the net was that there must be a transfer by a person in this country of assets to someone resident or domiciled abroad. A great deal of the discussion of the Clause has been on that basis. But when one comes to read the Clause with great care, one finds that in fact there is in it nothing


which appears to confine its operations to transfers by persons in this country of property in this country to persons abroad.
We all know that there must be resident in this country at the present moment many foreigners who, because of our penal taxation as they regard it—Income Tax and Surtax—deliberately, before they have come here to take up a position in this country or to reside here, have made settlements of their foreign property, of which they have had no intention of bringing one farthing into this country—settlements which they have been advised to make in a certain way, and having made them, they have been told, "You can safely go to Great Britain to take up your five years' job or your 10 years' job, or to become resident there, and so far as the Inland Revenue is concerned the income of this property which you leave behind in the foreign country will not come within the net of the Chancellor of the Exchequer."
As I read this Clause, if in fact anybody resident in this country, for a commercial purpose or otherwise, has, on the advice of his domestic lawyers, who knew what our system of taxation was, made such an arrangement, so that he may at any future time be able to enjoy the income or part of the income of that property which he left behind, the whole of the income of that foreign property would henceforth be aggregated with his income here and he would be liable to Income Tax and Surtax on it. It seems to me that that can have only one result, that with this Clause in operation against them foreigners now resident in this country will leave this country and cease to spend the money that they are spending here now. Still more, it seems to me that those foreigners who may contemplate coming to this country to spend their money here, when they are told that it will be useless for them to make any such arrangement as that I have indicated, will obviously not come. They cannot escape under the proviso, because these arrangements are deliberately made for the purpose of avoiding British taxation before they come here.
We know quite well that British subjects who go to reside in certain foreign States which have a very wide net of taxation, in their turn do not want

to be taxed on the property that they leave in this country for the benefit of their families and so forth in this country. It seems to me that income from foreign property which has in the past been transferred by a person resident in this country and is never to be brought over here, ought to be allowed to escape out of the net of this Clause. It is not for the general good of the country that foreigners should be put off coming here to spend money or to take up jobs in this country because of a Clause such as this.

Lieut.-Colonel ACLAND-TROYTE: I beg to second the Amendment.

4.14 p.m.

Mr. W. S. MORRISON: My hon. and learned Friend the Member for Ashford (Mr. Spens) has clearly explained the motive which has actuated him in moving the Amendment. Before I come to the particular case he gave as his reason for the Amendment, I would like to see whether, if we accepted the Amendment, it would not have a much wider effect than that which my hon. and learned Friend indicated as his main reason for moving the Amendment. What the Amendment proposes to do is to alter toe definition of assets which is contained in the Clause, and to exclude from it the property or rights of any kind which on the Budget date were outside the United Kingdom and have not subsequently been transferred inside the United Kingdom.
My hon. and learned Friend will remember that this Clause is designed to prevent the avoidance of taxation by means of the transfer of property abroad. If we were to exclude these foreign properties from the assets described in the Clause, would not that allow the evasion to continue by the transfer of foreign assets instead of British assets? There is no substantial difference between foreign securities and British securities from the point of view of the ease with which they can be sold and transferred, and one great objection to the Amendment is that, while a man would be prevented from avoiding taxation by transferring British securities, it would still be left open to him to do so by transferring foreign securities. There are cases of avoidance, with which we seek to deal in this Clause, in which foreign securities, and not British securities, are


used as assets, and I think that, if my hon. and learned Friend reflects, he will realise that there is an advantage in using foreign securities instead of British as the vehicle for these transfers, because foreign securities, if owned by a person abroad, escape not only Surtax but the standard rate as well. I know of one case in which a British subject has transferred a very large block of foreign securities to a company in Canada, and has thereby so reduced his Income Tax at the standard rate and his Surtax liability that he is escaping about £65,000 a year in taxation. Cases of that kind would, if we accepted this Amendment, be permitted.
My hon. and learned Friend based his case upon narrower grounds. He asked us to imagine the case of a foreigner ordinarily resident here who has transferred foreign securities to a foreign company. If the foreigner made that transfer in the past, before he became ordinarily resident here, the Clause would not apply to him, because in its opening words it refers to:
individuals ordinarily resident in the United Kingdom.
If he has made the transfer since he became ordinarily resident in the United Kingdom, then, of course, it falls to be decided whether he did so for the purpose of avoiding taxation or for other purposes, and, in the case of a foreigner ordinarily resident in this country, the ordinary Income Tax law at the present time charges him Income Tax only on such sums as are actually remitted to this country. In that case, therefore, a fresh element would be introduced before the Commissioners which would enable them clearly to distinguish whether tax avoidance was the motive or not, and, if it was plain that he had some other motive, it would be perfectly easy for the Commissioners to come to a decision in his favour. In the case of a foreigner ordinarily resident in this country, who, while resident in this country, has made a transfer of foreign securities, I would ask my hon. and learned Friend why that foreigner should be put in a better position than a British subject who has done the same thing. It is not easy to see why, when a man resident in this country who makes a transfer of British assets to a company abroad for the purpose of avoiding taxation is to be caught by the

Clause, a foreigner who makes a transfer of foreign securities for the same purpose should not also be caught by the Clause. If we are to try to stop this form of avoidance—and my hon. and learned Friend has been of great assistance to us in suggesting methods for making the Clause watertight—the provisions which we enact should apply to all residents in this country, whoever they may be. The Amendment would open too wide a door to evasion in the future, while the injustices of which my hon. and learned Friend complains are not so severe as he supposes, and for these reasons I ask the House not to accept the Amendment.

Mr. SPENS: I desire to thank the Financial Secretary for his reply. The words he has used may be of considerable assistance later before the Special Commissioners in regard to foreigners who, before coming over here, have put their affairs in order so as to try to make themselves only taxable in respect of such money and income as it is necessary for them to have in order to take up positions over here. For the rest, I cannot possibly press the Amendment, and in the circumstances I beg to ask leave to withdraw it.
Amendment, by leave, withdrawn.

4.22 p.m.

Mr. H. G. WILLIAMS: I beg to move, in page 14, line 24, to leave out "1935–36," and to insert "1936–37."
The principle underlying this Amendment is simple. I imagine that every one of us desires to stop tax avoidance of the kind which in the Icing run merely transfers the burden avoided to taxpayers who are more honourable and honest in their transactions. But people have been permitted to do certain things; certain assessments have been closed and settled; and it seems to me to be all wrong that, once an assessment has been made in accordance with one set of rules.—although the rate of tax payable on that assessment may be varied, because the fixing of the tax may take place at a later date, as is the case with Sur-tax—it seems to me to be all wrong that the rules should be altered in the middle of the match. [An Hon. MEMBER: "It is not a match; it is a game."] It is a game out of which a large number of skilful people do very well. I do not understand the game myself, but many


people on both sides seem to do rather well out of it. The question at issue is a constitutional issue—whether we should re-open a closed assessment; or, in other words, whether we should make a tax retrospective. Judging by the views expressed by persons so eminent and cautious as the financial editor of the "Times," and, I think, also the financial editor of the "Financial Times," this seems to be thoroughly bad in principle.
I see that the Chancellor of the Exchequer has on the Paper an Amendment which apparently will take Income Tax out of these assessments, but will leave Surtax in. His Amendment is a concession to finance, but not a concession to principle. Certain people will gain by it, but I am not concerned with whether they gain or lose, but with the constitutional question whether we are going to accept a re-opening of past assessments. If it were proposed to reopen the assessments of the general body of Income Tax payers once they had been made, a political situation would result that would make it impossible. If that bad principle is applied in this case, it will only be because the number of people affected is small, and their political influence, therefore, is not very great, but it seems most unfortunate that the Chancellor should be making this proposal because of his necessities for revenue. What they are in this case I do not know, because it is not easy to understand from the Financial Statement exactly how much he expects to get out of Clause 18 this year, since it is mixed up with other matters. There is no clear indication of what would be the loss of revenue this year and next year if these assessments were not re-opened, and I hope that some indication will be given in reply to this Amendment as to what the financial commitment is—in other words, how much it is going to cost if the Chancellor remains a financial purist, or, shall I say, a constitutional purist. I know that in responsible circles outside this House there is a very strong feeling that, although these provisions have a very strong justification, there is no justification whatsoever for making them retrospective.

4.27 p.m.

Sir JOHN WITHERS: I beg to second the Amendment.
I do not know whether I shall be in order in referring to the Chancellor's

Amendment which my hon. Friend has mentioned—in page 14, line 27, at the end, to insert:
Provided that for the year 1935–36 no income shall be charged to tax at the standard rate by virtue of the provisions of this Section, but surtax shall be assessed and charged as if any income which would, but for this proviso, have been charged as aforesaid had in fact been so charged.
If I may be permitted to refer to it, I think it would be very useful to do so. Sub-section (7) of Clause 18 says:
The provisions of this Section shall apply for the purposes of assessment to Income Tax for the year 1935–36.…
That, obviously, is a retrospective provision, because the Income Tax for 1935–36 was assessed in the autumn of last year, and was payable on 1st January this year, being for the year which has already closed, and which was closed before this Bill was brought in. To my mind the question is one of principle; it is not a question of the amount. On the question of evasion I should support the Chancellor very strongly, but I sincerely hope that retrospective legislation, in respect of taxation especially, will not be extended. The Chancellor has very kindly considered the matter, and has put down his Amendment which I have already quoted. I gather that it means that Income Tax, so far as these interests are concerned, is left as it is under the assessment for 1935–36, but that as regards Surtax, which is payable on 1st January, 1937, the assessment shall be so adjusted and varied as to include these interests. Of course, technically, that is really retrospective, because in a question of this kind it does not matter so much when you have to pay the tax; the question is in respect of what period it is assessable; and in this case the period for which it is assessable is admittedly the year 1935–36, although it is payable on 1st January, 1937.
Therefore, strictly speaking, it is a variation of the principle that we ought not to make it retrospective. The Chancellor, no doubt, will say that, as the tax has not to be paid until 1st January, 1937, there is a difference between that and the assessments which have already been concluded and paid, and that, therefore, this is not strictly speaking a retrospective Clause. I do not agree with that in principle, but of course there is


to a certain extent a prima facie case for it, and, as the Chancellor is extremely good in giving us even a morsel on this point, I myself should be inclined to accept the half loaf that is offered to us, and to advise the House to accept it rather than go to any hostile Division. Nevertheless, on the question of principle I wish to make a protest, in spite of the concession which the Chancellor has made.

4.30 p.m.

Colonel GRETTON: I think that in principle this Amendment, with which. I have associated myself, is correct. The argument that has been made on previous occasions when Surtax has been under discussion, that the assessment is different from that of the ordinary Income Tax, does not convince me in this case. The alternative Amendment makes it clear that Income Tax is not to be subject to reassessment and retrospective legislation, but the other matter is left over. The Chancellor's Amendment suffers from that kind of ailment which is so constantly exhibited in the phraseology devised by the Treasury. The tax law has so many technicalities that ordinary language appears to be inapplicable without upsetting something else, so that we cannot have the law governing taxation in simple language. As this matter affects particularly Surtax, and not in any great degree the great body of the community, these matters go on and no remedy is applied. I wish to express my agreement with the last speaker that we should be wise in the circumstances to accept what is offered to us by the Chancellor of the Exchequer and not press the matter on this occasion.

4.34 p.m.

Sir WILLIAM DAVISON: I am sorry that I cannot agree with my hon. Friend the Member for Cambridge University (Sir J. Withers) that on a question of principle, that is to say, retrospective legislation, half a loaf is better than no bread. On a question of principle of this kind no distinctions can be made. I consider that what applies to Income Tax in this connection applies equally to Surtax, which is only an increased form of Income Tax, and the matter is made worse when we remember that Surtax of Super-tax payers have already, owing to what I can only describe as a very

slim device, been mulcted in two payments of Super-tax or Surtax for the same year. By making the period for the payment of Surtax a different one from that of Super-tax, it was provided in the Finance Act, 1927, that both impositions should be payable in respect of the same year by the same person, or perhaps I should say by the same estate, because the person might possibly be dead. It was felt that, if the same people had to pay the same tax twice in the same year instead of once, there would be such an uproar that the House of Commons, as representing the people of the country, and representing what is fair and equal in the way of taxation, would not stand it, so it was put in such a way that it almost looked as if the Super-tax payer was getting a concession but, as a matter of fact, Super-tax was assessed and paid and Surtax was made payable in the next year for the same period.
I have always thought that that was a very slim device and I do not think it was very creditable to the officials of the Treasury or to the then Chancellor of the Exchequer. When we remember that, it makes it more reprehensible that we should now have retrospective legislation with regard to the Surtax payer, because the assessment of Surtax has been made and is completed, although the actual date of payment has not arrived. I appeal to the Chancellor, who, I know, takes a very strong view as to his responsibilities in seeing that fair play is meted out to all classes of the community, and who, I am sure, would not countenance anything that would be unfair to however small a body of taxpayers, to see that, if it is not fair for the ordinary Income Tax payer to have legislation of a retrospective kind, the same argument equally applies to the Surtax payer.

4.40 p.m.

Mr. CHAMBERLAIN: The subject that has been discussed on this Amendment was also discussed in Committee and, although I was not present on that occasion, I have since had the opportunity of studying what was said. I recall that my hon. Friend the Member for Colchester (Mr. Lewis) moved an Amendment which was intended to have practically the same effect as that which I have put down. The supporters of that Amendment felt that, although they


were not prepared in any way to defend the practices which had taken place and which had made this Clause necessary, and even though the effect of the Amendment would be to allow them to escape for one more year from the liabilities placed upon those who have adopted devices of this kind, it was worth while to make that sacrifice in order to preserve the principle of not making legislation retrospective. On further consideration I came to the conclusion that the argument against retrospection and against the possibility of setting up precedents is one that ought to have consideration. I have drafted an Amendment, which I shall presently move, to meet what I believe to be the real weight of the charge.
Do not, however, let us make a fetish of this idea about retrospective legislation. Let us consider what really is at the back of the principle. I suggest that, in the case of Income Tax, the principle that you want to protect is that, once a man has had his tax assessed and has paid it, he should be free to spend what remains to him as he likes, without being exposed to any further charge by the State in respect to that income. There is in question here both what we commonly know as Income Tax and what we commonly know as Surtax. The Income Tax charge applies only to certain foreign and colonial securities and to British securities on which tax is not deductible at the source. Where tax is deductible it has already been collected, and there is no question of any re-opening of the assessment, but where those other securities have been handed over to a foreign company they have escaped Income Tax at the standard rate and, as the Clause stands, the assessment would have to be re-opened and a further charge would be made. By the Amendment which I shall move that further charge will not now be made and no assessment that has once been made will be re-opened.
But when my hon. and gallant Friend the Member for South Croydon (Mr. H. G. Williams) says you ought not to change the rules in the middle of the match, I think he is carrying the analogy rather beyond the actual facts of the case. What are the rules, and who is observing the rules in this case? Is it in accordance with the rules of the match

that a person should be allowed to avoid Income Tax by receiving income in a form which in law is called capital, namely, redeemable debentures? It is altogether stretching the facts of the case to suggest that that is playing according to the rules and, although I know my hon. Friends have quoted judgments to the effect that an individual is allowed to arrange his affairs in such A way as to attract the smallest amount of taxation, still I think that, if it were laid down that, whatever happens, there would never be any retrospective legislation, that would really be an invitation to devise further and still more ingenious methods which would be very undesirable.
The case of Surtax is entirely different from that of Income Tax. In the case of Surtax no assessment has been made. The rate of Surtax itself is not fixed until this Bill becomes law. It is laid down in Clause 15 of the Bill, and it is not yet law. Therefore, there can be no question of retrospection there. The retrospective principle can only be brought about in the case of Income Tax at the standard rate. That is why I have made a distinction between Income Tax at the standard rate and Surtax in the Amendment which I propose to move, and why I could not accept any suggestion such as that made by my hon. Friend the Member for South Kensington (Sir W. Davison), that there is in effect any breach of any principle of retrospective legislation in the case of Surtax, which has not yet been assessed, and the amount of which has not yet been fixed, I understood from what my hon. Friend the Member for Cambridge University (Sir J. Withers) and the right hon. and gallant Gentleman below the Gangway said that they propose to withdraw the particular Amendment we have under consideration in order that I may move the Amendment which I have put down, even though it does not go as far as they would like it to go. In moving that Amendment, I would wish to make it quite clear that I do not consider that, in the future, people will be entitled, if they find new methods of Avoiding taxation of a similar character to these which are dealt with here in this Bill, to say that they are protected by anything I do now from retrospective legislation. I give them Air warning, and after that


fair warning I think that they will have no reason to complain if retrospective legislation should be found necessary in this particular class of case.

4.47 p.m.

Mr. LEES-SMITH: The Chancellor of the Exchequer has based his argument upon certain views of a number of judicial dicta which contrast the views which have been expressed by hon. Members who sit behind him, and for that reason I express my gratification that he has taken the line that he has followed this afternoon. Hon. Members in these Debates have quoted statements from judgments to the effect that any citizen who can find some legal method of avoiding Income Tax is doing something which is not blameworthy, and which is in no way contrary to the rules of good citizenship. These views have been quoted and given approval by a number of hon. Members on the opposite side of the House. The opinion of one of His Majesty's judges as to what is legal is one to which we in this House would listen with respect, but as to the judgment of what is proper and decent between one Income Tax payer and his fellow Income Tax payers, or between one member of the community and other members of the community, the judgment of this House is far better than the judgment of any judge in the courts of law. I am very glad, therefore, of the general spirit of the observations of the Chancellor of the Exchequer and of the more specific observations of the Financial Secretary to the Treasury in a recent Debate, which I took to mean that, to devise by skilful methods highly artificial arrangements by which you find a loophole in the law, which amounts to some dodge or trick by which you can avoid Income Tax, and yet because of that loophole not get caught in the meshes of the law, may be legal, is not good citizenship, and is not proper and decent, and ought not to be encouraged in this country.

4.50 p.m.

Mr. LEWIS: The Chancellor of the Exchequer reminded the House on the Committee stage that I moved an Amendment in other words designed to achieve the same object as the Amendment standing in his name. The Chancellor of the Exchequer, as he said, was

not present at that time, and I express my gratitude to him for having been kind enough subsequently to consider the argument then put forward and for bringing his Amendment before us to-day. There is in this matter a very clear distinction between Income Tax and Surtax, and I very much appreciate the action of the Chancellor of the Exchequer.
Amendment negatived.
Amendment made: In page 14, line 27, at the end, insert:
Provided that for the year 1935–36 no income shall be charged to tax at the standard rate by virtue of the provisions of this Section, but Surtax shall he assessed and charged as if any income which would, but for this proviso, have been charged as aforesaid had in fact been so charged."—[Mr. Chamberlain.]

Mr. SPEAKER: The next Amendment which I am taking is that in the name of the Chancellor of the Exchequer, on Clause 20.

CLAUSE 20.—(Amendments of 12 and 13 Geo. 5. c. 17. s 21, as respects investment companies.)

4.52 p.m.

Mr. W. S. MORRISON: I beg to move, in page 17, line 42, to leave out "been," and to insert "being."
This is purely a drafting Amendment. The Clause refers hack to Section 21 of the Finance Act, 1922, and if hon. Members will look at the words in the Clause of the present Bill they will see that it is necessary to reproduce in that Clause the identical words of the Section previously referred to.
Amendment agreed to.
Further Amendments made: In page 19, line 18, after "twenty-one," insert "of the Finance Act, 1922."
In line 32, after "twenty-one," insert "of the Finance Act, 1922."—[Mr. W. S. Morrison.]

CLAUSE 21.—(Provisions as to income settled on children.)

4.54 p.m.

Mr. CHAMBERLAIN: I beg to move, in page 22, line 15, to leave out "has arisen under the settlement," and to insert:
by virtue or in consequence of the settlement has been paid to or for the benefit of a child of the settlor, or dealt with as mentioned in Sub-section (2) of this Section.


In the case of the irrevocable post-Budget capital settlement, income spent on the maintenance of an infant child is being charged under Clause 21 as the parent's income. On the other hand, income accumulated for the future benefit of the child is not being so charged, and, in view of that distinction, it would be easy for the taxpayer to arrange that capital should be paid for the benefit of the child and that income should be accumulated. Paragraph (b) of Sub-section (3) is introduced to deal with that particular case, and to provide the necessary safeguards. But the settlement might cover other beneficiaries beside the children of the settlor, and in that case the words
the aggregate amount of the income which has arisen under the settlement.
will include not only the income which had been paid to or been accumulated for the benefit of the children, but also the income paid to or accumulated for the benefit of other persons. What we want to compare is the total sum paid for the benefit of the child of the settlor, on the one hand, and, on the other hand, the actual amount of the income under the settlement paid to or accumulated for the benefit of the children. This Amendment and the following Amendments are designed to secure this object. They operate, of course, in favour of the taxpayer by limiting the amount of charge which can be made under Sub-section 3 (b).

4.56 p.m.

Sir STAFFORD CRIPPS: May I ask, purely for information, the exact. point of having these words "by virtue or in consequence"? Are they intended to cover something indirect, or is it merely tautology?

Mr. CIHAMBERLAIN: The hon. and learned Gentleman puts me in rather a difficult position. I am not sure that I appreciate his point as to the use of these words. They appear to be the best words and are adequate for the purpose.

Sir S. CR1PPS: I understand the words "by virtue of the settlement," that is to say, any payment because there was a settlement so made. But I am not quite certain why the words "or in consequence" are required, that is all.

The ATTORNEY - GENERAL (Sir Donald Somervell): The best answer that I can make is that the words occur in the Act of 1922. It may be that the double phrase does not add much to the meaning of the single phrase, but as those words occur in that Section it was thought better to follow that precedent.
Amendment agreed to.
Further Amendment made: In page 22, line 16, leave out "it," and insert "the settlement."—[Mr. Chamberlain.]

4.58 p.m.

Mr. CHAMBERLAIN: I beg to move, in page 22, line 18, at the end, to insert:
(4) Income paid to or for the benefit of a child of a settlor shall not be treated as provided in Sub-section (1) of this Section for any year of assessment in which the aggregate amount of the income paid to or for the benefit of that child, which, but for this Sub-section, would be so treated by virtue of the foregoing provisions of this Section, does not exceed five pounds.
This Amendment is intended to exclude from the operation of Clause 21 any cases where the income of a child of a settlor does not exceed £5, and has been introduced at the instance of the National Savings Committee, who have made representations to me with regard to the effect of the Clause upon the savings of children. The effect of the Amendment will be that a child can accumulate savings by way of gifts from parents up to an amount which would produce £5 a year, say, £200 in the Post Office or a trustee savings bank, and no charge will thereby be incurred by the parent. It will also have the advantage that it will not be necessary for the Inland Revenue to analyse these small cases, and see how much of the amount has been due to gifts from parents, and how much due to gifts from other people.
Amendment agreed to.

4.59 p.m.

Mr. W. S. MORRISON: I beg to move, in page 22, line 35, to leave out
person," and to insert "party to a settlement.
This Amendment deals with another point. On the Committee stage, my hon. Friend the Member for Twickenham (Mr. Keeling) moved an Amendment to leave out the words "any person" and to insert:
any settlor or trustee of any settlement to which this Clause may apply.


What he complained of was that the Subsection would enable the Commissioners to make inquiries from any person whether or not that person was directly concerned or interested in the settlement. My hon. and learned Friend the Attorney-General replied on that occasion. The Amendment, I think, meets substantially the point that was made. The Commissioners will only be able to make inquiries of a party to a settlement, that is the settlor or trustees, who are the only persons who can give any information about it. The next Amendment which I propose to move provides that only particulars relating to the settlement may be asked in case there should be any idea that the Commissioners should extend their inquiries to matters altogether outside.

5.0 p.m.

Sir S. CRIPPS: In regard to the second Amendment—in page 22, line 37, after "particulars," to insert "relating to the settlement"—I suggest that the words are too narrow. The words might well be held to exclude particulars relating to payments made
by virtue or in consequence of the settlement,
which words we have just inserted. It would be very undesirable if some limitation was imposed as regards giving a fairly wide power of inquiry into payments as to which it may be doubtful whether they are or are not related to the settlement. That might very well be a question into which the Commissioners desired to inquire. The suggested Amendment would make it possible for a person to withhold those details and say: "These do not relate to the settlement," and the Commissioners would not be able to make inquiries to see whether they did relate to the settlement, which is the very object of the requirement. As the first Amendment limits inquiries to persons or parties to the settlement, and requires them to answer inquiries, they ought to answer inquiries generally and not merely inquiries which they say relate to the settlement. The second Amendment would put a certain power in their hands. I imagine that the question addressed to them would be somewhat in the following form: "You are required to answer the following question as regards particulars relating to the settle-

ment." They could get out of answering that, quite honestly, if they took the view that the particulars which the Commissioners desired did not relate to the settlement, and some action would have to be brought against them to determine whether or not the particulars did relate to the settlement.
I suggest that the Chancellor of the Exchequer should either adopt some wider words than the words "relating to the settlement," or that he should leave out the words altogether. Provision is being made specifically as regards the person who is to be interrogated, and once you have decided that, you want a wide area over which you can interrogate such person. If he cannot answer questions which in his view do not relate to the settlement, then you are excluded from finding out the delimitation of the area of payment, which is the thing that you require. Therefore, I would ask the right hon. Gentleman to withdraw the second Amendment and to be satisfied with the first Amendment. If he finds it necessary in another place to put in some other words, he can do so, but to insert the words of the second Amendment would undoubtedly limit the powers of the Commissioners.

Mr. CHAMBERLAIN: I am much obliged to the hon. and learned Member. I am inclined to agree with him and to accept his suggestion. Therefore, I will not move the second Amendment.
Amendment agreed to.

5.4 p.m.

Mr. SPENS: I beg to move, in page 23, line 4, after the first "or." to insert "during the life of the settlor to."
This Amendment is intended to cover one specific type of settlement which ought not to be made a revocable settlement by virtue of the definition in the Clause. In a number of cases there are settlements which have been made before marriage and after marriage, settlements which were made years ago, where people have settled sums of money on trustees for the benefit of their children, and those settlements contain a power for the trustees, if the settler dies and the income of the widow does not amount to a certain figure, to apply part of the children's income to make up the income of the widow to a certain sum during the life of the widow. As paragraph (a) is


drafted that would be a settlement under which the income of the children might possibly reach the wife of the settlor, and my suggestion is that that particular type of settlement, made years ago and which had nothing to do with any avoidance of tax, ought not to be made revocable by virtue of the definition. It is in the interests of these persons that it should be possible to make a bona fide settlement on the children, but providing that if the surviving spouse requires part of the children's income, the trustee should be able to apply that income for the benefit of the surviving spouse.
I suggest that the definition might be modified by making it apply to payment during the life of the settlor to the wife or husband of the settlor, but where the settlement provides that part of the children's income may be applied to the benefit of the widow or the widower, then in those circumstances the settlement should not be hit. I do not think that this provision will affect any substantial number of settlements, but they do exist. One specific instance was brought to my notice where a post-nuptial settlement was made 20 years ago. The settlor put aside certain stock for the benefit of his children, but there was inserted in the settlement power to the trustee if after the death of the settlor his widow's income amounted to less than a few hundred pounds, to apply during the remainder of her life a part of the children's income for her benefit. That type of settlement had nothing whatever to do with tax evasion.

Mr. ANNESLEY SOMERVILLE: I beg to second the Amendment.

Mr. W. S. MORRISON: This matter has been considered. In view of what my hon. and learned Friend has said there is undoubtedly a case of hardship, and we think that the Amendment can be accepted.

5.8 p.m.

Mr. BENSON: I fail to see the logic behind the argument of the hon. and learned Member. His case is that when the trust was originally established there was no intention on the part of the settlor to avoid taxation. If the Amendment were not carried and this particular trust attracted tax at the aggregate rate, no damage would have been done to the original idea behind the settlement,

because it was not made for the purpose of avoiding aggregation. Why then should we give it specific advantages which it was not designed to obtain? Hon. Members talk as if this Clause is going to upset settlements. It will do nothing of the kind. All that is proposed under the Clause is that settlements should aggregate for tax purposes, and if the income is income for the benefit of the child I see no reason why that income should not aggregate irrespective of the motives behind the establishment of the trust. The main basis of our taxation ought to be enjoyment of income. The Amendment proposes that income settled by the parent for the benefit of his children is to be enjoyed by himself. For that reason, I hope that we shall vote against the Amendment.

Mr. LEES-SMITH: I hope the Governmente will give some reply to my hon. Friend. There has been no debate on the Clause. The Amendment has been moved and the Financial Secretary has simply said that it has been considered and that he would accept it. I do not think that the matter should be dealt with in that summary fashion. There has been an argument adduced from this side of the House and it ought to be answered.

5.10 p. m.

Mr. MORRISON: I intended no disrespect to the House—

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert): The hon. Member can only speak again by leave of the House.

Mr. MORRISON: By leave of the House, I should like to say that I intended no disrespect to the House in not speaking at length on the Amendment. The only case that one could really make for resisting the Amendment is that this settlement is not an outright settlement on the children for life, but a provision whereby the surviving spouse can benefit. When one is considering a question of that character one is well away from tax avoidance, and consequently the point is narrowed. It is a comparatively small matter and does not affect any large number of settlements. Therefore, I do not think that the fact that part of the income may go to the surviving spouse gives any ground for making a settlement revocable which is otherwise irrevocable.

5.11 p.m.

Sir S. CRIPPS: That does not seem to be quite a satisfactory answer. I understood the point made by the hon. and learned Member who moved the Amendment to be that in regard to a settlement made 20 years ago there is a power that the trustees may pay to the widow a certain amount of money. Everybody has great sympathy with widows and with children left without a father, but the Amendment would surely apply to future settlements and to settlements made quite recently, and not merely to settlements made 20 years ago. In those cases there would be a method by which one could evade tax, because one could have so framed the settlement as to make moneys payable to the widow in the event of death of the settlor. In those circumstances there would not be any difference as to whether the money is payable back to the husband or the widow, or payable to one or the other on the death of one of them.
Naturally, one has sympathy for a widow, but perhaps not the same sympathy for a widower who is left behind because usually he is capable of earning money. The Amendment applies to the husband or the widow who is left behind. I do not see the logic of making the incident of the death of one or other of the married persons a means of distinguishing for taxation purposes between an aggregation of incomes in the household in one case and not in the other. If the husband is left behind and there happens to be a Clause in the trust settlement by which a portion of the children's income can be paid to the husband on the death of the wife, what difference does that make from a taxation point of view?
Why should a man who has not put a certain provision in a settlement have to pay, and a man who has, although his wife is still living, not have to pay Income Tax. It seems to me that it will mean a distinction for taxation purposes as between two identical families living side by side, a man and wife with three children. In one case there is a settlement on the children which makes provision for the payment of part of the money to the husband or the wife on the death of one of them. In that case the measure of taxation is quite different to the measure of taxation in the case where

no such provision is in the settlement. It is not the death which will make a difference in taxation; it is the form of the settlement. If there is a provision that a payment may be made after death, it is that type of settlement which will he dealt with differently from a settlement in which there is no such provision. You will have two families treated differently for taxation purposes, merely because in the one case the draftsman has put some phrase into the settlement which has not been put in the other. That seems to me to be quite illogical.
I appreciate and sympathise with the case of a widow, that she should not be in a less advantageous position. I can understand that case; but that is not the position. This Amendment is to operate at all times once a settlement is made in that form, and it makes a wholly erroneous distinction on a perfectly false basis between families in precisely similar circumstances, and it will create an anomaly which will arise from the mere form of the drafting of the deed. I should be much obliged if the Attorney-General will tell me on what basis you can justify a differentiation in taxation between two identical families, simply because in the one case such a provision has been put in the settlement and in the other case it has not.

5.10 p.m.

The ATTORNEY-GENERAL: The hon. and learned Member for Bristol, East (Sir S. Cripps) has asked whether the Amendment applies to the future as well as to the past. It does for this limited purpose: It makes an alteration in the definition of what is to be deemed to be an irrevocable settlement, and will come into the future to this extent only, that it will come in only in so far as under settlements funds are accumulated. It does not deal with the ordinary case where the income is, in fact, expended year by year for the benefit of the children. That is a fairly narrow field. The Amendment is designed to meet this case. Assume that a settlement provides for some extra income going to the wife on her becoming a widow. Under the Bill without the Amendment that would be deemed to be a revocable settlement, with the consequences. It would not have the advantage of the letting out of the accumulations which can be claimed by irrevocable settlements. The Amendment would


allow these cases to have this advantage without making the settlements revocable. That is what the Amendment effects.
The hon. and learned Member for Bristol, East says that the argument is not so strong if the extra money is going to the husband on the death of his wife. Of course it is not so strong, but it is also true that such settlements are not likely to occur. It is rather unusual to provide that the husband on the death of his wife should have extra payments. The hon. and learned Member also pointed out that the Amendment might cover certain cases outside the general intention of the Clause. We will consider these points and if this concession, which is designed to meet a genuine case, can be used for some sinister purpose, in order to take certain payments out of the general provisions of the Clause, we will consider whether such a loophole can be stopped. The Amendment, I think, meets a case which the House would desire to meet, and we will keep our eye on any sinister purposes for which it might be used.

Mr. BENSON: The Attorney-General has referred to this as dealing with a very narrow area, but in view of the fact that in the future only a certain type of trust will be allowed is it not likely to become a much wider area?
Amendment agreed to.
Further Amendment made: In page 23, line 7, after the first "or," insert "during the life of the settlor of."—[Mr. Spear.]

5.24 p.m.

Mr. W. S. MORRISON: I beg to move, in page 23, line 16, to leave out "any person," and to insert "the settlor."
As the Clause stands it provides for the case of the payment of "any penalty by any person." We think that the words "any person" are too wide and propose to substitute the payment of "any penalty by the settlor." The Clause is really directed to the sort of trust where the settlor purports to undertake an obligation by way of annual payments towards the trust but has in it a provision whereby he is discharged from his obligation on the payment of a comparatively trifling penalty. That is a form of trust which may be used for the purpose of tax evasion. The Amendment

is directed to cases where you have a trust deed and the penalty is to be paid by the settlor in the event of his not carrying out his obligations.

5.25 p.m.

Sir S. CRIPPS: Surely the Government are again doing a rather foolish thing. There is a simple way of evading this provision by saying that the penalty shall be paid by the settlor or some other person on his behalf. The Amendment lays it down that the penalty must be paid by the settlor, but if the penalty is to be paid by some other person on behalf of the settlor it would not come within the Amendment. The Clause as drafted would cover the case where someone was given a discretionary power to release a. settlor of a penalty, but with the limitation which is being put in the Clause would apply only to the actual penalty payable by the settlor in person, and not if it is payable by someone else on the settlor's behalf. Suppose a third party was nominated to pay the penalty in the event of the settlor failing to comply with the provisions of the agreement? It would be perfectly possible to put such a provision in an agreement, and it seems to me that if this is going to be limited to the penalty being paid by the settlor himself it is a simple thing to put in a provision in the settlement that "A" shall pay the penalty in the event of the settlor not complying with the agreement. That would be sufficient to get out of this proposal; and it would be a perfectly valid form of agreement.
Surely it is much wiser to leave these words in. I am sure they were put in for this purpose, that whatever the form of penalty payable by whatever person, if it is to release the settlor from complying with the provisions of the settlement, it is not to be allowed as an irrevocable agreement. I suggest to the right hon. Gentleman that here again it would be much wiser to make the wording "payment of the penalty by any person," because it is limited to a failure by the settlor or some person such as a trustee to make a payment out of it. I understand that the object is to see that the payments are duly made and that there is no way of avoiding them by a mere subterfuge. If any person is to be able to release the payments by making a penalty payable under the agree-


ment—whether it is the trustee, the settlor or a third party—a loophole will thereby be given for those payments not being made in accordance with the settlement. Therefore a subterfuge would be made for avoiding the tax. I hope the right hon. Gentleman will not press his Amendment.

5.31 p.m.

Mr. SPENS: I hope the Chancellor will press the Amendment. It is true, as my hon. and learned Friend the Member for East Bristol (Sir S. Cripps) said, that the Amendment may conceivably open a new loophole, but I understand that the objection to the Clause as it is at present is that in every Scots settlement there is a general provision according to which any trustee, if he fails to carry out any minor or major matter of the trust, may be relieved of liability on payment of a certain stated penalty. That is a common provision in most Scots settlements. As the Clause is at present, it would bring within its scope every settlement containing such a provision. It is true that we wish to make these very improper settlements, under which a settlor undertakes obligations and then says he can get out of them if he pays 5s. to the trustees—

Sir S. CRIPPS: Would not the position which the hon. and learned Gentleman is stating be met if there were payment of a penalty by any person in the event of the settlor failing to comply?

Mr. SPENS: My hon. and learned Friend has got ahead of me. I am bound to say that I would prefer to have the Amendment rather than the Clause as it is, so as to make it clear that there are not roped in those curious penalty clauses which exist in Scotland and which have not as their object the evasion of taxation. I hope the right hon. Gentleman will press the Amendment.

5.33 p.m.

The ATTORNEY-GENERAL: Sub-section (7, c) states that:
For the purposes of this Section, a settlement shall not be deemed to be irrevocable, if the terms thereof provide … for the payment of any penalty by …
and my right hon. Friend proposes to insert "the settlor." The class of ease at which this Sub-section is aimed is that in which the settlement provides

for annual payments, but provides that on payment of some penalty—often a nominal one—by the settlor the annual payments may cease. In future those annual payments will be brought in, so that this really deals only with existing settlements. All the settlements that have been brought to our notice are settlements in which the provision regarding the penalty is a provision for a penalty by the settlor. In the Committee stage it was suggested that, in that case, the words "by any person" were unnecessarily wide, and that has been remedied by the Amendment on the Paper. This point is quite distinct from that which the hon. and learned Gentleman the Member for Ashford (Mr. Spens) raised concerning Scots settlements, which 'will come on the next Amendment.
Amendment agreed to.

5.35 p.m.

Mr. W. S. MORRISON: I beg to move, in page 23, line 18, to leave out from "settlement," to the end of line 21.
It is this Amendment to which the remarks of my hon. and learned Friend the Member for Ashford (Mr. Spens) apply. In the Committee stage my hon. and learned Friend moved to leave out Sub-section 7 (c) altogether, and he referred particularly to the provision for the indemnification or exoneration of the trustee in the event of his failing to enforce the provisions of the settlement. I have subsequently had information to the effect that in Scotland practically every deed that is created according to law contains a provision of this character providing total or partial exoneration for the trustee in certain circumstances. The reason for the almost universal inclusion of this type of provision in the Scots deeds is that the law of Scotland is extremely severe in this connection and it would be impossible to get trustees to fill their often thankless office if they were exposed to the full rigours of the law. Now, the House will realise that here we are dealing with pre-Budget settlements. We have come to the conclusion that the inclusion of the provision for partial indemnification or exoneration, which exists as we are told in a great number of well-drawn deeds here and exists universally in Scotland, should not make the settlements revocable if they are otherwise irrevocable. For that


reason, we propose that the words in this Sub-section concerning the case of total or partial indemnification or exoneration of any person should be left out.

5.37 p.m.

Mr. BENSON: The Financial Secretary has stated that in this Clause we are dealing with settlements already created. That is not correct. Settlements already created may have been in the minds of the Chancellor and his advisers when this Section was drafted, but under Subsection 3 (a) it is still possible to create irrevocable trusts of a certain type, and as far as I can see it is possible that if these words are left out a loophole can be made for tax evasion. I will give the hon. and learned Gentleman one case. There may be set up a capital trust the income of which does not aggregate unless it is paid for the benefit of the children. So far as I can see there is nothing about aggregation in the Clause. The income aggregates only if and when it is paid in any year for the benefit of the children. Under this Clause and under the Amendment of the Chancellor, it is possible to set up such a trust with the object of accumulating the income of the capital funds for the children until they are 21, but a provision can also be added to the trust which entirely indemnifies and exonerates the trustees in the case of their failing to carry out the terms of the trust. If the trustees pay the money over for the benefit of the children the aggregation occurs, but if they are entirely exonerated no matter what they do, they can hand it back to the parents as a free gift. In that case they would be violating the terms of the trust, but they could be exonerated by another provision in the trust.
The result is that a trust can be set up which lays down that the income shall be accumulated, the trustee can violate the terms of his trust by handing back the income as a free gift to the settlor, and it does not aggregate because it is not the income of the settlor and has not been applied for the benefit of the children. The hon. and learned Gentleman may say that that is an entirely fantastic and artificial arrangement. That is true, but on the last five Clauses we have been dealing with equally fantastic and artificial arrangements. There is definitely a loophole here, and as far as I can see Sub-section 3 (a) is the

only possible educational trust that can be now set up. Therefore, I think it is highly desirable that we should take every step to see that Sub-section 3 (a) is not used in the future, as educational trusts have been used in the past, for the avoidance of aggregation.

5.42 p.m.

Mr. SPENS: The case to which the hon. Member has referred may be a possibility, but his whole argument depends on the legal validity of a provision giving total exoneration to the trustees for carrying out a trust which they have undertaken to carry out. It is unfortunate that there is no decision of the courts, as far as I know, as to the validity of a provision giving total exoneration to trustees, but if I were a betting man I should have very little doubt as to what such a decision would be. I do not believe that our law would ever recognise as valid a trust under which Mr. X undertook to carry out certain duties as trustee and then relied upon a clause which said that he was to be entirely exonerated for carrying out that trust. I do not believe for one moment that such a clause would be recognised as valid in this country. There will either be no trust at all, or the trustee can be liable for breach of trust or embezzlement.

Mr. BENSON: There are in this Clause the words "total indemnification." Does the hon. and learned Member suggest that would invalidate the trust if it came before a court of law? The point is that it would never come before a court of law until the beneficiary was of age and capable of suing. During the whole of that period aggregation would have been avoided, and the question as to whether the trustee is liable or not is a matter on which, as the hon. and learned Member said, there has not been a decision. The trustee might be the parent himself, who has handed over the income to himself and who might rely upon the good will of his child in not suing him.

Mr. SPENS: Suppose you had a trust containing a clause giving total exoneration to the trustee, I venture to think that within a month there would be a case in the courts to establish whether that trust was valid or not. There is no


trust that does not contain some partial exoneration in some connection or other, and I would remind the House, as I did earlier, that there is a statutory exoneration of trustees who have acted honestly and reasonably but have committed certain breaches of the trust. It was mainly because of that provision that I objected to the concluding words of this Subsection. I do not think there is any real danger of a loophole being available in the future but I fear that if these words stand a great deal of injustice may be done.
Amendment agreed to.

5.46 p.m.

The ATTORNEY-GENERAL: I beg to move, in page 23, line 21, at the end, to insert:
Provided that a settlement shall not be deemed to be revocable by reason only—

(i) that it contains a provision where-under any income or assets will or may become payable to or applicable for the benefit of the settlor, or the wife or husband of the settlor, on the bankruptcy of any such child as is mentioned in paragraph (a) of this Sub-section or in the event of an assignment of or charge on that income or those assets being executed by such a child; or
(ii) that it provides for the determination of the settlement as aforesaid in such a manner that the determination will not, during the lifetime of any such child as aforesaid, benefit any person other than such a child, or the wife, husband, or issue of such a child; or
(iii) in the case of a settlement to which Section thirty-three of the Trustee Act, 1925, applies, that it directs income to be held for the benefit of such a child as aforesaid on protective trusts, unless the trust period is a period less than the life of the child or the settlement specifies some event on the happening of which the child would, if the income were payable during the trust period to him absolutely during that period, be deprived of the right to receive the income or part thereof."

It is easier to follow this proviso if one reads Sub-section (7) of the Clause, leaving out the two negatives in the second line. It is intended that for the purposes of this Clause a settlement shall be deemed to be revocable if it contains certain incidents, and one of the incidents which will make it revocable under paragraph (a) of the Sub-section is any payment whatever during the life of the child to the settlor

or his wife. It was brought to my right hon. Friend's attention in the Committee stage that certain provisions were normally inserted by draftsmen in trusts, intended to be irrevocable for all ordinary purposes, which owing to the general nature of the words in paragraph (a) would cause the trusts to be deemed to be revocable for the purposes of this Clause. It is to meet that class of case that I am now moving this proviso. For example, it is a common clause in settlements of this kind that in the event of the bankruptcy of the child, which, of course, could not occur until the child is over 21, or in the event of the child making a charge upon the income, the settlor has a power of resettling. It was argued that the mere existence in a trust of a clause of that kind might cause it to be deemed to be revocable under paragraph (a). It is not the intention that those trusts which are irrevocable in their main provisions should be deemed to be revocable merely because they contain a provision of that kind, and that case is dealt with in the first paragraph of the proviso.
The second paragraph of the proviso, deals with a case which was put forward by the hon. Member for Dundee (Mr. Foot) during the Committee discussions. He drew attention to the case of a settlement which provided for the handing over, in certain circumstances, of the money to the child, and he suggested that that might be held to be a determination of the settlement. It was further pointed out in discussion that Section 33 of the Trustee Act contains certain provisions as to what is to happen to the money in the event of some act being done which divested the beneficiary of his right under the trust. It is not an uncommon thing to incorporate by reference that Section of the Trustee Act in settlements of that kind. A settlement which provided for the bankruptcy of the child, as referred to in paragraph (i) of the proviso, might incorporate Section 33 of the Trustee. Act which carried the matter a little further. Therefore, it is considered better to have paragraph (iii) of the proviso in order to prevent someone saying that the mere existence of a reference to Section 33 of the Trustee Act makes a, settlement revocable because it incorporates the statutory provision by which a settlement may be


revoked on the performance of the divesting act. It is a matter of some little complexity, but I think I have indicated the nature of the cases which it is intended to meet by the three paragraphs of this proviso.
Amendment agreed to.

6.54 p.m.

Mr. KEELING: I beg to move, in page 24, line 8, at the end, to insert:
(e) a child shall be deemed to be an infant only while under the age of sixteen years or while, being over the age of sixteen years and under the age of twenty-one years, he is not maintaining himself from income which he earns.
In the Bill as it now stands the settled income of the child can be aggregated with the income of his father as long as the child is under 21 and unmarried. I want to show that the effect in some cases will be absurd and oppressive, an effect which I do not think is intended by the Chancellor of the Exchequer. The vast majority of young people, even those belonging to the richer classes, start earning their own living long before the age of 21. A man may give a son aged 18 money with which to start business, or a son may set up. in business himself, at the age of 18 or even of 16, with the aid of an allowance settled on him by his father. In many cases that boy will live apart from his father. He may even go to the other end of the world. Yet the Bill provides that the settled income of that child is to be aggregated with the income of the father and that the father is to be required to pay Surtax not only on his own income in excess of £2,000, but also on any income which he has settled on his child, over which he might have no control whatever. I can conceive a case in which a parent would become liable for a total sum in excess of his own income, in which case the Chancellor of the Exchequer would require the parent not only to pay over the total of his own income but would fine the miserable worm for venturing to be alive.
There is a further anomaly. A husband and wife, as long as they remain together, have their incomes aggregated, but the moment there is a divorce or even a separation the incomes of the two are treated separately. Yet under the Bill a son who—it may be very properly and even necessarily—lives away from his father, has his settled income

added to his father's income for Surtax purposes. Surely the Chancellor of the Exchequer ought not to regard with a more kindly eye a husband and wife who are living apart—a relationship which is abnormal in the eyes of Church and State—than a father and son living apart. In Committee I moved that the settled income of the child should be aggregated only as long as the child continued at a school or other educational establishment. That is the condition which qualifies a parent to receive the £60 allowance after the child reaches the age of sixteen. I suggested that when a parent ceased to have that allowance it was reasonable that he should cease to have the settled income of the child aggregated with his own. The Financial Secretary objected to my Amendment on the ground that it would discourage higher education. I doubt whether it would do so, but to meet my hon. and learned Friend's point, I have put down this Amendment which is in a narrower form and is not open to that criticism. My hon. and learned Friend admitted that the purpose of my Amendment in Committee was a very proper one. I hope he will see his way, on this occasion, to translate that benevolent admission into beneficent action by accepting the present Amendment,

5.59 p.m.

Mr. H. G. WILLIAMS: I beg to second the Amendment.
I think there is a case of considerable substance behind this proposal and I am grateful to my hon. Friend for having moved the Amendment. In this Clause we are applying what might be called an inverted means test. It is true that for the moment we are only dealing with settlements but we are establishing a new principle. I regret that the right hon. Gentleman the Member for Epping (Mr. Churchill) is not here, because this question might have had some interest for him. For example, there was the case where his own son, under 21, according to what appeared in the newspapers, was paying Surtax. It would have been rather interesting if that income had been aggregated with the income of the right hon. Gentleman. We are getting on to dangerous ground, because we are already liable to pay our wife's Income Tax, and before we know where we are, if we do not watch this Clause, we may find ourselves liable to pay the Income Tax of


our children, wherever they may be or whatever they may be doing.
I think we should apply some limit, and when a child ceases to be a child in the ordinary sense of the term, as distinct from the legal sense, my hon. Friend wants the child to be regarded as a separate person from the point of view of Income Tax. I think that summarises what he seeks to do by his Amendment. It becomes rather absurd if, when a child is starting in business, he is still to be regarded as being the same person as his father from a taxation point of view. There is no magic about the age of 21. It is convenient for many purposes, but it is not the age at which most people start to earn a living, and, honestly, when people reach the stage of starting to earn a living, they ought then to be regarded as separate persons from their parents, otherwise you will have this extraordinary position, that a child will be earning money and liable to Income Tax on it, and simultaneously, in respect of another part of his income, somebody else will be liable. It is a great anomaly, and I hope the Chancellor of the Exchequer will give more serious consideration to this Amendment than he has given to some previous Amendments this afternoon.

6.2 p.m.

Mr. CHAMBERLAIN: My hon. Friend the Member for South Croydon (Mr. H. G. Williams) has been indulging what I might term a somewhat prolific imagination. He suggested that this Clause is only the beginning of a process which he pictured as ending, or perhaps proceeding, to the aggregation of the incomes of all the members of a family with that of the parent. We are in fact a very long way from anything of the kind. This is a Clause which deals with a, settlement under which income may be paid for the benefit of a child, and in certain circumstances the income settled is to be aggregated with the income of the parent for the purposes of Income Tax. The provisions are only to apply where the child is an infant and unmarried at the beginning of the Income Tax year. An infant for this purpose means a child under 21, and one of the purposes of the Amendment is to alter the definition and make it apply only to children under 16, and where they are

earning their own living over that age, it suggests that the moneys payable for their benefit under a settlement should not be aggregated with the income of the parent. I am afraid I cannot accept that Amendment, because it seems to me to be open to exactly the same objection as was found by my hon. and learned Friend the Financial Secretary to a somewhat similar Amendment moved on the Committee stage. The fact is that this would really penalise the parent who was encouraging his children to proceed with their education after 16 years of age. In a case where the education of the child was continued after the age of 16, under the Amendment the income of the settlement would be aggregated with the parent's income, but if the child had ceased his education and had started to earn his own living, then the parent's tax liability would be reduced. That seems to me to give the parent relief where he least needs it to be given, and I should have thought that that was not a course which my hon. Friend would wish to advocate and that it would create a new and very serious anomaly.
Amendment negatived.

6.6 p.m.

Mr. W. S. MORRISON: I beg to move, in page 24, line 12, after "made," to in-sent "or entered into."
This is purely a drafting Amendment. Amendment agreed to.

CLAUSE 32.—(Provisions as to Road Fund.)

6.7 p.m.

Mr. HOLDSWORTH: I beg to move, in page 30, line 12, to leave out the Clause.
On 16th June during the Committee stage we had a long discussion on the Road Fund, but I do not intend going over all the points that we then discussed. I believe there is genuine concern about this change regarding the Road Fund. The Chancellor of the Exchequer told us that the reason of the change was that he should have complete control of all moneys coming into the Road Fund, and when the Minister of Transport was sent for, he said he agreed with it as a democratic proposal. Yesterday there was published a "Memorandum on Broadcasting," and what is done there is quite inconsistent with what the Chancellor of the Exchequer


said ought to be done with regard to moneys which come to the Treasury. On page 4 of the Memorandum, in paragraph 8, we read:
The Government accept the view of the Committee that there should be some increase in the initial assignment of revenue to the Corporation. They propose to fix this at 75 per cent, of the net licence revenue—.
That is absolutely contrary to what the Chancellor of the Exchequer said when he was trying to make the point that the Treasury should have complete control over all moneys which the State levied. We are not satisfied that the same amount of money will be spent on the roads when the Chancellor gets control of this fund. It is a very interesting thing to note that the number of accidents is still mounting. It is more true to-day than ever to say that there is a great necessity for better roads in the country, and I am absolutely certain that there is a serious danger of the Chancellor of the Exchequer using the money which comes in from licences, etc., not for the specific purpose of seeing that the roads are kept in good order and that new roads are created, but in some other way.
I should like to know whether we shall still receive a report on the administration of the Road Fund year by year, and I ask that particular question because, reading through the Debate on 16th June, I see that the Chancellor of the Exchequer made a reply to the hon. Member for Ebbw Vale (Mr. A. Bevan), but it is not quite clear to me whether it is this particular report that is going to be published year by year. We put down two Amendments on this point, which I understand are not to be called, but this report is valuable to anybody interested in road matters. All sorts of particulars are given in the report, and we also know from it what is being devoted to each particular area, and I think it is essential that the House should continue to receive that information. It is a striking thing, for example, to see the rate poundage spent by the different authorities in the different areas. I have a list here, in which I find Middlesex with a 9d. rate for highways, and the list goes right down to the Holland Division of Lincolnshire, with 9s. 6d. in the £ spent on highways. It is an interesting thing also to examine the

list and to find that whereas on highways and bridges Middlesex has a 9d. rate, for education, police, and health it has a 5s. rate, and then we go down to Carmarthen, with 9s. on highways and bridges and 10s. 8d. for the remaining three items.
Some of these authorities are spending a tremendous amount of their total income on highways, and I understand that some 17 county councils have passed a resolution to the effect that they cannot work the five years road plan because the burden on their rates will be increased. Therefore, I want to ask for a specific answer to that question, whether the House will be in receipt, year by year, of the report, which I understand is a statutory obligation. I want to know whether that is to be altered, or whether it will remain the same, in order that Members may form a true judgment as to what is being done and as to the burden which is being cast upon particular authorities.
I also want to say, quite candidly, that in spite of what the Chancellor said, I cannot accept the statement that Parliament will have more power with the change in the direction of this particular fund. I think the right hon. Gentleman found it very inconvenient indeed, and that other Chancellors have also found it inconvenient, to have to face the protests of this House when money was being taken from the Road Fund for other purposes. It is inconvenient for a Chancellor to defend a raid on the Road Fund, but it is not so inconvenient to defend a grant, and now you are substituting the obligation of defence, which the Chancellor had to make when money was taken from the fund, by a sort of gift which he makes in a particular year. He will now be able to say, "I am giving you this," and that is a much easier thing for him to do.
It was interesting to me to listen to the speech of the Financial Secretary on the Committee stage of this Bill, when he said that Parliament would have complete control. In theory that is correct, but we all know how it works in practice and that no private Member of the House can move an increase in expenditure. That is in the power of the Treasury Bench alone. We did know before that a certain amount was going to the Road Fund, but now we are to be dependent


upon the generosity of the Chancellor of the Exchequer, or, to put it another way, I think we shall be dependent upon what expenditure there is in a particular year and upon the small amount that he can afford to give to the Road Fund. This change of principle is bad because the necessary expenditure which ought to be made on roads will not in future years receive that consideration which it ought to receive. With the present Chancellor we shall have to be prepared to accept what he gives us, for the right hon. Gentleman is not noted for giving way when once his mind is made up. I wish the Government were the same in other directions. We should know then what we were doing. I am genuinely afraid that under this new system the amount that will be spent on the roads will be inadequate.

6.16 p.m.

Mr. G. STRAUSS: I beg to second the Amendment.
The only reason that I can imagine which influenced the Chancellor of the Exchequer to make this alteration in regard to the Road Fund is that he is tired of humiliating himself year by year and asking the House in an apologetic manner, as he has done on several occasions, to allow him to raid the Road Fund; so fearing that he might be convicted as an habitual thief, he has asked the House to alter the law relating to the Road Fund so that he can get complete control of it and cannot be accused of making another raid on it. I know the theoretical justification which can be put forward for bringing the revenue derived from the Road Fund into the general pool. Everybody admits that the constitutional arguments have a great deal to be said for them. In fact, they may be sound, but what I think the House feels, not only on these benches but, as we discovered in previous discussions, on the Conservative benches, is that the past record of the Government in this matter shows that the result of this alteration of control will be that less money will be spent on the roads than has been spent in the past.
No one would mind that if the roads were adequate, but everybody knows that the roads are most inadequate and that, as a result of that inadequacy, every year hundreds of people are being killed

and injured who need not be killed and injured. No one suggests that the bad state of the roads is the sole or major cause of accidents, but it is a cause. There are narrow congested streets which ought to be by-passed, corners which ought to be rounded off, and any number of needed improvements on our road system which, without question, would bring about a fall in the number of road casualties if they were made. That is why the House as a whole is so alarmed at this proposal of the Government. The accidents on our roads are, unfortunately, not falling. From figures which I have worked out I find that in Great Britain roughly one person is killed on the roads every hour and 45 are injured. In view of these appalling figures, nobody can be complacent at the prospect of the roads being improperly managed and not adequately improved.
Why do I say that there is justification for believing that the control of the Road Fund by the Chancellor of the Exchequer rather than by the Minister of Transport is likely to bring about a diminution of money spent on the roads? There is very good reason in the history of the last few years to substantiate that statement. The Treasury, who are now going to be in almost sole control, in 1931, when what some people called "the crisis" was affecting the life of this country, stopped road improvements which were urgently necessary for the saving of life. In the view of everybody with knowledge of the road position that action was utterly unjustifiable, but, in spite of protests from all quarters, road improvements were stopped. As a result, many people who should be alive to-day are now dead, killed on the roads which should have been improved or bypassed. When the Treasury grudgingly agreed that certain roads should be improved or certain bridges built, they did it in such a manner as to make the improvements of doubtful benefit. I would remind the Parliamentary Secretary to the Ministry of Transport of one road improvement in London close to this House which was affected in this way. I refer to Lambeth Bridge. It was proposed to make it an 80-foot bridge, but the Government said "There is a financial stringency," and, not understanding the road problem, insisted that that bridge should be built only 60 feet wide,


instead of 80 feet, as was proposed. Even now that bridge is almost congested and will soon be inadequate, and she money that was spent on it will, to a large extent, be wasted.
In 1933, again, we saw the Treasury handicapping the improvement of our road system by bringing in a new system of road grants. Fortunately that has recently been altered as a result of pressure and negotiations between the Ministry of Transport and various highway authorities. In that year the the Treasury and the Ministry of Transport introduced a new grant system under which the grants for roads in built-up areas were materially reduced. In fact, in London, and doubtless in the provincial cities, instead of the local authorities getting a 50 per cent. or 60 per cent. grant on certain road schemes, the formula was 20 altered that they got sometimes less than 20 per cent., and even 12½ per cent. out of the Road Fund. The Treasury said they would give grants from the Road Fund only on the site value of the property cleared. The hon. Member for South Shields (Mr. Ede), who is chairman of the Surrey County Council, doubtless agrees with me from his personal experience that that serious curtailment of grant had a definitely handicapping effect on the improvement of roads in the big cities.
The most alarming aspect of this question is the view which the Chancellor of the Exchequer holds in regard to the necessity of building new roads. The fountain head of the Treasury said in the House only a few weeks ago that he was doubtful whether new roads were necessary or desirable. I would like to quote the right hon. Gentleman's words:
I do not subscribe to the theory that you can measure the safety of the roads by the amount of money you spend on them. The proof of that is to he found in the fact that the more money that has been spent on the roads the larger has been the number of accidents.
Later he said:
I certainly do say that the more roads there are and the more cars there are on the roads contribute to the accidents, and that if you make more roads you make more opportunities for accidents."—[OFFICIAL REPORT, 28th April, 1936; col. 788, Vol. 311.]
As I understand it, the Road Fund in future will pass more and more under the control of the Treasury than ever in the

past. We have the view of the Treasury on the necessity for new roads and the improvement of existing roads, and if we may judge from the Chancellor's speech, they are doubtful whether new roads are wanted at, all. It is a very serious outlook not only for the motor industry, but for the whole population which now uses the roads as passengers of private cars or charabanes and as pedestrians. The Road Fund will pass snore under the control of the Treasury, although they have such dangerous and reactionary views on this question.

6.26 p.m.

Mr. PETHICK-LAWRENCE: I want to put before the House an aspect of this question which I do not think has received adequate attention. The case for the Chancellor's proposals is that this change really makes no difference at all, inasmuch as the Road Fund has only been spent with the approval of the Treasury. When the Minister of Transport has been able to make out a good case for a road, the Treasury have allowed him to use the Road Fund for the purpose; and when he has not been able to make out a good case, the money has remained in the Road Fund, and later the Chancellor has felt justified in taking the money and using it for other purposes. The Government say that that is really going to be the situation in future, and that when the Minister of Transport makes out a good case for expenditure on roads, the Treasury will allow him to have the money precisely as is the ease with all the other services of the State. They say that where it is a question of other services of the State it is the practice of the Treasury to give all the money adequate for the purpose, and they ask why there should be any difference between expenditure on the roads and expenditure on other services of the State.
It is to that argument that I want to address myself, because I think I can show that there is a fundamental difference between money voted for other purposes of the State and money voted for the new road system. In other services of the State there is a more or less automatic necessity for money to be spent. When you are dealing with education, the number of children, the number of classes, and the growth of any particular locality dictate the growth of the educational services. The services


under the Ministry of Health increase according to certain conditions that arise automatically, over which the Minister and the Treasury have no control. The Treasury may be able to pair off a little more here and the Minister to demand a little more there, but, broadly speaking, the needs of the services are automatically dictated. In the case of the Inland Revenue Department the staff required and the expenditure to which the Department is put are a necessary corollary of the services to be rendered to the State in collecting revenue. We have laid down certain rules and regulations under which pensions are granted, the latitude which the Minister of Pensions is allowed in giving a little more or a little less is seriously circumscribed, and the Treasury has to provide the amount required for that Department.
When we come, however, to the question of expenditure on new roads I suggest that the situation is entirely different. So far as the Road Fund has to contribute to the more or less automatic expenditure on road repairs it may be true that it is similar to any other service, but as regards building new roads and bridges there is a very wide distinction. The question of a new bridge across the Forth is one in which the Financial Secretary, as a Scotsman, and I, as representing a Scottish constituency, are very much interested. That is a matter on which there will be room for the exercise of wide discretion on the part of the Treasury. The provision of a large new road is not one of those automatic services for which the Treasury will have necessarily to find the money; it is a matter on which it will be open to the Government to exercise great discretion.
Therefore I claim that the analogy between the expenditure on roads out of the Road Fund and the expenditure on the ordinary services of the country is very far from complete. In fact there is a wide divergence between the two cases, and it was for that reason, I suggest, that the House, in its wisdom, decided to place the Road Fund on a different footing, basing the amount that it was desirable to spend upon the roads not upon the year-to-year decisions of the Treasury in allowing or disallowing expenditure which the Minister of Transport would like to incur, but upon an entirely

different basis, the total number of motor vehicles on the roads. In spite of everything the Chancellor of the Exchequer has said I submit that there is a very close connection between the roads which the country requires and the number of motor vehicles. When the number of motor vehicles is large and increasing it is most important to be able to undertake considerable expenditure upon roads and bridges.
The proposals in this Clause would sweep away that connection. It would make the expenditure on the roads entirely independent of the amount of money collected from motor taxation. I think the decision of Parliament in days gone by that the expenditure on the roads ought to be connected with the amount of money received from the motor vehicle duties was a sound one, and that the divorce of that connection is an improper divorce, and that the ground on which it is based that these services can be treated in the same way as other services, and that the Treasury can be trusted to use its discretion, is a quite unsound basis. Therefore, even at this eleventh hour of our discussions on the Finance Bill, I would make one more appeal to the Financial Secretary and the House to omit this Clause and allow the Road Fund to remain in the form in which it has so long existed.

6.36 p.m.

Viscount WOLMER: ; I am not sure that the argument of the hon. Member for East Edinburgh (Mr. Pethick-Lawrence) very much helps his case, because, as he admitted at the beginning of his speech, there have been as many raids on the Road Fund in the past as there are likely to be in the future.

Mr. PETHICK-LAWRENCE: I said that there had been raids in the past, and that I thought they would be greater in the future.

Viscount WOLMER: I apologise if I misrepresented the hon. Member. I have really risen to say that while I have great sympathy with the objections to the plan proposed by the Government and the financial purists, I do not think the system with which we are parting was by any means ideal. I am surprised that my hon. Friends opposite who have spoken have not made more use of the analogy of the wireless licence fees. It


seems to me to be a very strong analogy. The State gets the fees which wireless listeners pay, and the money so collected is administered by an independent corporation which has to pay a certain proportion of the fees to the National Exchequer. Those who wish to avoid raids on the Road Fund should try to get a system of that sort. These motor duties are, in many respects, analogous to the fees paid for wireless licences. The origin of the duties was to provide improved roads such as the advent of the motor car necessitated, and undoubtedly the raids on the Road Fund in the past have been felt by motorists to be a great grievance and injustice. I regret the step the Government are now taking, because it seems to me that it will facilitate the taking of money originally intended for the upkeep of the roads for other purposes.
I would prefer to see the question dealt with on the same basis as the wireless fees, which are administered by an independent corporation, who act under charter, are not the plaything of party politics, and not subject to fluctuations in policy with a change in Government. Such a corporation would be able to coordinate the whole road system of the country and bring the various local authorities together.
It seems to me that the roads are not going to be helped by this new proposal, though I admit to the full the strength of the arguments which the Chancellor of the Exchequer and financial purists have advanced in favour of it. It really means that the Treasury will have a tighter grip over the expenditure on the roads than it has had in the past, and I am afraid the Treasury will be likely to take a shortsighted view and to pursue a penny-wise policy. I say so on account of the experience I had when I was at the Post Office. The Treasury was constantly preventing the Post Office from incurring capital expenditure which would have resulted, very shortly, in great economies. The Treasury, by the very tight grip it kept over the Post Office, prevented capital expenditure which would have brought a very good return. The Post Office has now secured some emancipation, as a result of the Bridgeman Report, and already we have seen the benefits of that emancipation. I am afraid the Ministry of Transport and the whole road

system of the country will be put under that penny-wise Treasury control.
Let us remember how exceedingly weak the Minister of Transport is when he is fighting against the Chancellor of the Exchequer. The Minister of Transport is not even in the Cabinet—I do not think he ever has been in the Cabinet; at any rate he is very seldom in the Cabinet. What chance has he got in fighting for this money against the Chancellor of the Exchequer? Let us remember another factor. When the Chancellor of the Exchequer—I am not talking about this Chancellor, but all Chancellors, because they are all very much the same when they get down to their job—is considering his Estimates and his Budget he has big demands made upon him by powerful colleagues who are in the Cabinet representing the War Office, the Admiralty, the Air Ministry, the Ministry of Agriculture and the Ministry of Labour. The poor little Minister of Transport is not in the Cabinet at all. The Chancellor has to disappoint somebody, because there is never enough meat to go round to satisfy the whole hungry family, and I venture to predict that those Ministries which are not represented in the Cabinet will always suffer when it comes to deciding how the money is to be spent.
Therefore, the tendency of the step now to be taken will be, I am afraid, further to restrict the amount of money spent on the roads, and that I should regard as a real tragedy. The quotation made from the Chancellor's speech was, no doubt, a very entertaining one. He said the more roads we built the more people we killed, and that, no doubt, is perfectly true, but if we do not build more roads there will be a great many more people killed. There is no halfway in this matter. We cannot abolish the motor car from this country. I believe that in certain West Indian islands one is not allowed to import a motor car, or to drive a motor car, because the people do not want the expense of building roads. That is a possible policy, but it is a policy which is no longer possible in England, and, therefore, we must provide adequate roads for motor cars. Motor cars are being turned out by the factories at the rate of several thousands a week, and


they will force, and are forcing, pedestrians and everybody else off the old road system. The only way to deal with the problem is to provide adequate roads and bridges. Unless that is done thousands of people will be unnecessarily killed, and the motor car industry itself will be throttled.
I have recently been in the United States of America, and I was very much impressed by the way in which they have tackled this problem. They raised huge loans to build new road systems, and they calculate that the increase in motor cars which has resulted from this vast improvement of the road system more than pays the interest and sinking fund on the loans. In America, the construction of highways is regarded not as a costly business, but as a profitable investment by the State legislatures. If I thought the Treasury would regard it as such I would not mind, but I am very much afraid that the effect of this proposal will be to discourage the spending of money upon the roads. I hope that my hon. and learned Friend will be able to give us some assurance on this matter.

6.46 p.m.

Mr. LEWIS: The hon. Member for North Lambeth (Mr. G. Strauss) made an eloquent appeal for the spending of more money upon the roads, and none of us who heard it will take exception to what he said upon the subject; but we are not invited to decide this afternoon what should be spent on the roads. We are asked to decide whether the amount to be spent upon the roads in any given year shall depend upon the yield of a particular tax, or whether the amount should be determined by the Government in relation to the needs of other public services. One of the strongest arguments that could have been produced against the proposal to delete the Clause was put forward by the hon. Member for East Edinburgh (Mr. Pethick-Lawrence), who purported to be speaking in favour of the proposal. He was at great pains to point out that a large element of discretion enters into the decision as to new roads and bridges, and he was apparently quite oblivious of the fact that he was advocating a method in which there is no discretion at all. If you decide that the amount to be spent on the roads in a given year is to depend upon the yield

of a particular tax, there is clearly no discretion in such a method of arranging your expenditure. The arguments of the hon. Gentleman were strongly in favour of the proposal put forward by the Government, in which the element of discretion is all-important.
One of the various suggestions made by the Noble Lord was that we should look to the British Broadcasting Corporation and try to evolve a similar system. I thought he would be perfectly logical and suggest that we ought to re-impose tolls on the roads. The British Broadcasting Corporation lives on toils on the air, and I thought he was going to suggest that some road fund should live on tolls on the roads. Having regard to the Noble Lord's views in matters of progress, I should not have been surprised if he had followed that line, but it is hardly one which would commend itself to the House. The Chancellor of the Exchequer has taken a step which ought to have been taken long ago. I shall be glad to see this anomalous arrangement for the furnishing of funds for the Road Fund done away with.

6.49 p.m.

Mr. W. S. MORRISON: This topic is now becoming rather threadbare, and I trust that hon. Members will acquit me of any desire to be discourteous if I do not mention again all the arguments in favour of the proposal which is now being challenged. I prefer to say a few words on some of the outstanding points. The hon. Member for South Bradford (Mr. Holdsworth) asked whether the House would continue to have a report from the Minister of Transport. The Minister has a statutory duty imposed in Section 3 (6) of the Roads Act, 1920, and that is not altered in any way by the present proposal. Reports will be furnished as before to hon. Members who desire to see them. I have been asked to what extent this is a financial change and not a change in the Road Fund itself. The whole of the speech of the Noble Lord the Member for Aldershot (Viscount Wolmer) was founded upon the assumption that this change in financial administration would result in less money becoming available for roads or would, in some way, result in a less favourable attitude towards roads. An analysis of the speeches that have been made upon the subject shows that the real ground why hon. Members oppose this change is not


so much that they object to the financial change involved. Indeed, the hon. Member for North Lambeth (Mr. G. Strauss) said that the arguments proposed on financial grounds might be sound; I had not expected such support from that quarter. Hon. Members fear that this change is more than that, and that it involves a change in attitude towards the roads, which will in some way be starved.
As far as we can see, this change has nothing whatever in it of that effect at all. When hon. Members talk about the changes proposed, do they visualise the system under which we are living now, and with which they are very reluctant to part? The hon. Member for North Lambeth and other hon. Members who know the work of local authorities argue that the authorities receive only a fraction of that to which they are entitled. That is happening under the present system? When hon. Members speak of Treasury control let them realise the extent to which control is exercised now, and must be exercised, in the public interest, when expenditure is asked for upon the roads. There will be no change in that. The arguments used by hon. Members would be valid only if the Minister of Transport were himself a highway authority, entitled to expend year by year all the produce of the tax which now comes into the Fund, but he is not a highway authority, and it is impossible for him to expend all that money.
An attempt was made by the hon. Member for East Edinburgh to make a distinction between this service and other services, on the ground that expenditure on roads was different from other categories of expenditure. He said that in respect of other categories of expenditure the Treasury had to find money which was generally initiated in some circumstances not under the control of the Treasury and he cited pensions, which were, he said, a fact outside which started the demand for money. He seemed to imagine that roads are in a different category.

Mr. PETHICK - LAWRENCE: New roads.

Mr. MORRISON: Even new roads are in the same category. If there is a difference of opinion between us it is that he seems to imagine that the Minister of Transport is the originator in these matters. He is not the highway autho-

rity. It is the local authority which is the highway authority, and which is responsible for and must initiate every demand for money for the construction of new roads or the improvement of old roads. It is obviously true that this service, as a voted service, can be every bit as efficient as other funds. When one considers Parliamentary control, how has that been changed? The hon. Member spoke of the lack of Parliamentary control, and contrasted it with the control that Parliament has at the moment over the Road Fund. Making the fund a voted service would increase the control, and the opportunities for discussing the service and insisting upon, its proper administration.
There have been complaints about the raiding of the Road Fund in the past. I can give hon. Members this promise: There will be no more raids on the Road Fund. Hon. Members ought to be very glad to hear that. The Noble Lord drew a picture of one Ministry fighting another, and seemed to consider that we ought to put the roads into the same category as broadcasting. There is no analogy between these two functions of the State, either in relative importance or the amount of money that is involved. If hon. Members still fear that this change means a change in policy, let them apply the proper test, which is, what is proposed to be spent on the roads at the present time? Do the efforts of the Minister of Transport, or the co-operation of the Chancellor of the Exchequer, show any diminution, in the energy which is being spent upon this road problem? There never was a more ambitious programme before the country in regard to roads than there is at the present time. We have a five-year programme, as has already been mentioned.

Mr. E. J. WILLIAMS: The money ought to have been spent years ago.

Mr. MORRISON: The hon. Member is very difficult to satisfy. If our programme had been a small one, he would have regarded it as negligible, and now that we have a large one he does not give us any credit for it, but says that it ought to have been done long ago. There is no argument in that. I am asking hon. Members not to remain rooted in the past, but to consider what is being done in the present. The five-


year programme is an ambitious one for the development of the roads of this country. The schemes already submitted by local authorities represent a total of £139,000,000. Hon. Members will therefore realise that this financial change does not go side by side with any alteration in policy, or any diminution of the Government's energy in tackling this great problem.

6.59 p.m.

Mr. EDE: I do not think that the hon. and learned Gentleman has done himself justice on this occasion. He is accused of stealing the golden eggs in the past, and he says: "I will get out of that accusation in the future. I will steal the goose. Then there will be no trouble about my coming along for the eggs in future." He made the point that the Minister of Transport was not a competent highway authority and did not initiate schemes, but those who have served on a local authority know that the Minister comes to us and says: "You ought to do this particular piece of

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 192; Noes, 133.

Division No. 263.]
AYES.
7.1 p.m.


Acland-Troyte, Lt.-Col. G. J.
Cruddas, Col. B.
Hopkinson, A.


Amery, Rt. Hon. L. C. M. S.
Culverwell, C. T.
Hore-Belisha, Rt. Hon. L.


Anderson, Sir A. Garrett (C. of Ldn.)
Davison, Sir W. H.
Horsbrugh, Florence


Anstruther-Gray, W. J.
Dawson, Sir P.
Hudson, Capt. A. U. M. (Hack., N.)


Aske, Sir R. W.
Dodd, J. S.
Hulbert, N. J.


Assheton, R.
Dower, Capt. A. V. G.
Hume, Sir G. H.


Astor, Major Hon. J. J. (Dover)
Duckworth, G. A. V. (Salop)
Hunter, T.


Balfour, G. (Hampstead)
Duncan, J. A. L.
Inskip, Rt. Hon. Sir T. W. H.


Balneil, Lord
Dunglass, Lord
Jackson, Sir H.


Baxter, A. Beverley
Ellis, Sir G.
Jones, L. (Swansea, W.)


Beamish, Rear-Admiral T. P. H.
Elliston, G. S.
Keeling, E. H.


Beaumont, M. W.(Aylesbury)
Emery, J. F.
Kerr, Colonel C. I. (Montrose)


Birchall, Sir J. D.
Emmott, C. E. G. C.
Kerr, H. W.(Oldham)


Blair, Sir R
Emrys, Evans, P.V.
Kimball, L.


Blindall, Sir J.
Entwistle, C. F.
Kirkpatrick, W. M.


Boothby, R. J. G.
Errington, E.
Lamb, Sir J. Q.


Bossom, A. C.
Erskine Hill, A. G.
Law, Sir A. J. (High Peak)


Boulton, W. W.
Findlay, Sir E.
Leckie, J. A.


Bower, Comdr. R. T.
Fox, Sir G. W. G.
Leech, Dr. J. W.


Brown, Col. D. C. (Hexham)
Fremantle, Sir F. E.
Lees-Jones, J.


Brown. Rt. Hon. E. (Leith)
Furness, S. N.
Lennox-Boyd, A.T. L.


Brown, Brig.Gen. H. C. (Newbury)
Ganzoni, Sir J.
Lewis, O.


Browne, A. C. (Belfast, W.)
Gibson, C. G.
Lindsay, K. M.


Bullock, Capt. M.
Gledhill, G.
Llewellin, Lieut.-Col. J. J.


Campbell, Sir E. T.
Glyn, Major Sir R. G. C.
Lloyd, G. W.


Carver, Major W. H.
Gower, Sir R. V.
Locker-Lampson, Comdr. O. S.


Cayzer, Sir C. W. (City of Chester)
Graham, Captain A. C. (Wirral)
Loftus, P. C.


Cayzer, Sir H. R. (Portsmouth, S.)
Gretton, Col. Rt. Hon. J.
MacAndrew, Colonel Sir C. G.


Cazalet, Thelma (Islington, E.)
Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)
MacDonald, Rt. Hn. J. R. (Scot. U.)


Chamberlain, Rt. Hn. Sir A. (Br.W.)
Guy, J. C. M.
Macdonald. Capt. P. (Isle of Wight)


Chamberlain, Rt. Hn. N.(Edgb't'n)
Hacking, Rt. Hon. D. H.
McEwen, Capt. J. H. F.


Channon, H.
Hamilton, Sir G. C.
McKie, J. H.


Chapman, Sir S. (Edinburgh, S.)
Hanbury, Sir C.
MacLaren, A.


Clarke, F. E.
Hannah, I. C.
Macnamara, Capt. J. R. J.


Colfox, Major W. P.
Hannon, Sir P. J. H.
Magnay, T.


Collins, Rt. Hon. Sir G. P.
Harbord, A.
Makins, Brig.-Gen. E.


Colville, Lt.-Col. Rt. Hon. D. J.
Hellgers, Captain F. F. A.
Margesson, Capt. Rt. Hon. H.D.R.


Cook, T. R. A. M. (Norfolk N.)
Heneage, Lieut-Colonel A. P.
Markham, S. F.


Cooper, Rt. Hn. T. M. (E'nburgh,W.)
Hepworth, J.
Mayhew, Lt.-Col, J.


Croft, Brig.-Gen. Sir H. Page
Herbert, Major J. A. (Monmouth)
Mellor, Sir R. J. (Mitcham)


Crooke, J. S.
Hills, Major Rt. Hon. J. W. (Ripon)
Mellor, Sir J. S. P. (Tamworth)


Crookshank, Capt. H. F. C.
Holmes, J S.
Mills, Sir F.(Leyton, E.)


Croom-Johnson, R.P.
Hope, Captain Hon. A. O. J.
Mills, Major J. D. (New Forest)




Mitchell, Sir W. Lane (Streatham
Ross Taylor, W. (Woodbridge)
Strauss, E. A. (Southwark, N.)


Morrison, G.A. (Scottish Univ's.)
Ruggles-Brise, Colonel Sir E. A.
Strauss, H. G. (Norwich)


Morrison, W. S. (Cirencester)
Salmon, Sir I.
Stuart, Hon. J. (Moray and Na[...]n)


Muirhead, Lt.-Col. A. J.
Samuel, Sir A. M. (Farnham)
Sutcliffe, H.


Neven-Spence, Maj. B. H. H.
Samuel, M. R. A. (Putney)
Tasker, Sir R. I.


Nicolson, Hon. H. G.
Scott, Lord William
Tate, Mavis C.


O'Connor, Sir Terence J.
Shaw, Major P. S. (Wavertree)
Thomas, J. P. L. (Hereford)


O'Neill, Major Rt. Hon. Sir Hugh
Shaw, Captain W. T. (Forfar)
Thomson, Sir J.D.W.


Ormsby-Gore, Rt. Hon. W. G.
Shepperson, Sir E. W.
Titchfield, Marquess of


Palmer, G. E. H.
Simon, Rt. Hon. Sir J. A.
Walker-Smith, Sir J.


Peaks, O.
Sinclair, Col. T. (Queen's U. B'lf'st),
Ward, Lieut.-Col. Sir A. L. (Hull)


Peat, C.U.
Smiles, Lieut.-Colonel Sir W. D.
Wardlaw-Milne, Sir J. S.


Penny, Sir G.
Smith, Sir R. W. (Aberdeen)
Waterhouse, Captain C.


Petherick, M.
Smithers, Sir W.
Wickham, Lt.-Col. E. T. R.


Porritt, R. W.
Somervell, Sir D. B. (Crewe)
Williams, H. G. (Croydon, S.)


Radford. E. A.
Somerville, A. A. (Windsor)
Windsor-Clive, Lieut.-Colonel G.


Ramsden, Sir E.
Somerville, D. G. (Willesden, E.)
Wise, A. R.


Reed, A. C. (Exeter)
Southby, Comdr. A. R. J.
Withers, Sir J. J.


Reid, Sir D. D. (Down)
Spender-Clay, Lt.-Cl. Rt. Hn. H. H.
Womersley, Sir W. J.


Rickards, G. W.(Skipton)
Stanley, Rt. Hon. Oliver (W'm'[...]'d)



Robinson, J.R. (Blackpool)
Stewart, J. Henderson (Fife, E.)
TELLERS FOR THE AYES.—


Ropner, Colonel L.
Storey, S.
Major Sir George Davies and Mr. Cross.




NOES.


Adams, D. (Consett)
Griffiths, J. (Llanelly)
Oliver, G. H.


Adams, D. M. (Poplar, S.)
Groves, T. E.
Paling, W.


Adamson, W. M.
Hall, G.H. (Aberdare)
Parker, J.


Ammon, C. G.
Hall, J. H. (Whitechapel)
Parkinson, J. A.


Anderson, F. (Whitehaven)
Hardle, G. D.
Pethick-Lawrence, F.W.


Attlee, Rt. Hon. C. R.
Henderson, A. (Kingswinford)
Potts, J.


Bonfield, J. W.
Henderson, J. (Ardwick)
Pritt, D. N.


Barnes, A. J.
Henderson, T. (Tradeston)
Qu[...]bell, D. J. K.


Barr, J.
Hills, A. (Pontefract)
Richards, R. (Wrexham)


Benson, G.
Holdsworth, H.
Riley, B.


Bevan, A.
Holland, A.
Ritson, J.


Broad, F. A.
Hollins, A.
Roberts, W. (Cumberland, N.)


Bromfield, W.
Jagger, J.
Robinson, W. A. (St. Helens)


Brooke, W.
Jenkins, A. (Pontypool)
Rothschild, J. A. de


Brown, Rt. Hon. J. (S. Ayrshire)
John, W. Rowson, G.



Buchanan, G.
Johnston, Rt. Hon. T.
Salter, Dr. A.


Burke, W. A.
Jones, A. C. (Shipley)
Sexton, T. M.


Cape, T.
Jones, H. Haydn (Merioneth)
Short, A.


Chater, D.
Jones, Morgan (Caerphilly)
Simpson F. B.


Cluse, W. S.
Kelly, W. T.
Sinclair, Rt. Hon. Sir A. (C'thn's)


Clynes, Rt. Hon. J. R.
Kennedy, Rt. Hon. T.
Smith, E. (Stoke)


Compton, J.
Kirby, B. V.
Smith, Rt. Hon. H. B. Lees- (K'ly)


Cove, W. G.
Kirkwood, D.
Smith, T. (Normanton)


Cripps, Hon. Sir Stafford
Lathan, G.
Sorensen, R. W.


Daggar, G.
Lawson, J.J.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dalton, H.
Leach, W.
Strauss, G. R. (Lambeth, N.)


Davies, D. L. (Pontypridd) Lee, F.
Taylor, R. J. (Morpeth)



Davies, S. O. (Merthyr)
Leonard, W.
Thorne, W.


Day, H.
Leslie, J. R.
Tinker. J. J.


Dobbie, W.
Logan, D. G.
V[...]ant, S. P.


Dunn, E. (Rather Valley)
Lunn, W.
Walkden, A. G.



Ede, J. C.
McEntee, V. La T.
Watson, W. McL.


Edwards, Sir C. (Bedwellty)
McGhee, H. G.
Welsh, J. C.


Evans, E. (Univ. of Wales)
Maclean, N.
Westwood, J.


Fletcher, Lt.-Comdr. R. T. H.
MacMillan, M. (Western Isles)
White, H. Graham


Frankel, D.
Mainwaring, W. H.
Whiteley, W.


Gallacher, W.
Marklow, E.
Williams, D. (Swansea, E.)


Gardner, B. W.
Mathers, G.
Williams, E. J. (Ogmore)


Garro Jones, G. M.
Maxton, J.
Williams, T. (Don Valley)


Gibbins, J.
Messer, F.
Wilson. C. H. (Attercliffe)


Graham, D. M. (Hamilton)
Milner, Major J.
Windsor, W. (Hull, C.)


Green, W. H. (Deptford)
Montague, F.
Woods, G. S. (Finsbury)


Greenwood, Rt. Hon. A.
Morrison, Rt. Hon. H. (Ha'kn'y, S.)
Young, Sir R. (Newton)


Grenfell, D. R.
Morrison, R. C. (Tottenham, N.)



Griffiths, G. A. (Hemsworth)
Naylor, T. E.
TELLERS FOR THE NOES.—




Sir Hugh Seely and Mr. Acland.

SECOND SCHEDULE.—(Supplementary provisions as to prevention of avoidance of Income Tax by transactions resulting in the transfer of income to persons abroad.)

7.10 p.m.

The ATTORNEY-GENERAL: I beg to move, in page 34, line 13, to leave out "and (subject as hereafter provided)."
This Amendment and the following four Amendments all deal with the same matter. In the Bill as presented to the House and now in the hands of hon. Members, there was a provision by which there could be an appeal from the Special Commissioners to the Board of Referees on the question of fact, which arises under the proviso in Sub-section (1) of Clause 18, which says:


Provided that this Sub-section shall not apply if the individual shows to the satisfaction of the Special Commissioners that the transfer and any associated operations were effected mainly for some purpose other than the purpose of avoiding liability to taxation.
In the course of the discussion in Committee on this Schedule various hon. Members said that they thought the Bill would be more satisfactory if this appeal were removed and the matter were left to the determination of the Special Commissioners, in whose hands is the determination on other matters of fact. The present Amendments are designed to give effect to that suggestion and to leave this matter, as with other matters of fact, to the Special Commissioners, with a right of appeal on questions of law.
I should like, on behalf of the Chancellor of the Exchequer, to dissociate him, myself and the Government from certain criticisms made by some hon. Members of the Board of Referees. These Amendments are moved in no way on those grounds. They are moved, first of all, on the ground that every additional right of appeal does, or may, involve extra cost, and unless those concerned feel that the right of appeal is one of value to them and are anxious to preserve it, it is better for everybody's interest to have one determination rather than two determinations. It is common ground, I think, in all these matters that the Special Commissioners have the greatest confidence of those who come before them in their fairness and correctness in determining questions of fact, and the general sense seems to be that it would be better in this matter to remove those provisions of the Schedule which provide for this appeal to the Board of Referees, and to leave this matter with other matters of fact to be determined by the Special Commissioners.

7.14 p.m.

Major HILLS: I want to thank the Chancellor of the Exchequer for what he has done. I was one of those who suggested this Amendment. No tribunal stands higher than the Special Commissioners, and I am very glad that it has been decided to leave the matter to them, subject, of course, to an appeal to the High Court.
Amendment agreed to.
Further Amendments made: In page 34, line 13, after "assessments," insert:
made by the Special Commissioners and to cases to be stated for the opinion of the High Court.
In line 24, leave out paragraph 6.
In line 34, leave out paragraph 7.
In line 37, leave out paragraph 8.—[Mr. TV. S. Morrison.]

7.15 p.m.

Major HILLS: I beg to move, in page 35, line 2, after "person," to insert:
through whom it is alleged any such transfer as is referred to in Section eighteen has been effected, or through whom any income or other property derived from assets so transferred is paid to any individual ordinarily resident in the United Kingdom.
This Amendment was put down by myself and my hon. and learned Friend the Member for Bridgwater (Mr. Groom-Johnson) with the object of defining rather more closely the persons whom the Special Commissioners may require to furnish information under Clause 18 of the Bill. It seems to us that it is rather too wide to allow the Special Commissioners to require any person to furnish information, and accordingly we suggest the insertion of these limiting words. I suggest that they would give all the powers that are proper and necessary. Nobody wants a roving inquiry. I want the Special Commissioners to have all the information, and the means of getting all the information, that they need, and I suggest that with these limiting words the power of making proper inquiries in accordance with paragraph 9 of the Second Schedule would not be diminished, although the ambit of the inquiries would be rather limited.

7.17 p.m.

Mr. CROOM-JOHNSON: In supporting this Amendment, I only want to say one thing. Most people who have had any experience of them recognise, not only the fairness and ability with which the Special Commissioners discharge all the duties that are cast upon them by the Income Tax Acts, but the extreme care with which they do their work, and the great confidence which the public have in the care which they exercise. In supporting the Amendment, I should not like it to be thought for a moment that I desire to suggest that the Special Commissioners, even if the Clause stands as


it is at present, will not take the very greatest care to see that they do not cast their net more widely than is necessary in order to carry the Clause into effect. At the some time, however, it has been suggested to me, by those who have gone into this matter more deeply than I have had the opportunity of doing, that there would be a danger, if the Clause were left in its present wide form, of the possibility of persons who are not really concerned in the transaction being called upon to give information under the powers conferred by the Clause.

7.19 p.m.

The ATTORNEY-GENERAL: I appreciate, of course, the motive that is behind this Amendment, and I appreciate what my hon. and learned Friend has just said with regard to the fact that, even if these words are wider than is necessary, it is not at all likely that the powers will be in any way abused. But the subject-matter of the Clause with which these words deal, namely, Clause 18, is, as the House knows, the transfer of assets into foreign countries, and the whole field is so strewn with nominees, alter egos, one-man companies and aliases—I use the word in no offensive sense—that we think it desirable to adhere to the very wide form of words in the Clause as it stands. I do not want to criticise the Amendment, but, if I did, I should probably be able to show that it might not cover in certain cases the man who was the actual tax avoider, and that he would be able to get the transfer done by someone else. But, especially in view of what my hon. and learned Friend has just said, we feel that it is desirable to keep the general powers as they are in the Clause. If there were any sort of abuse of them, representations could be made and the matter dealt with, but, in view of the subject-matter with which this part of the Schedule deals, we should like the powers to be as wide as possible.

Major HILLS: In view of the Attorney-General's explanation, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.

7.21 p.m.

Major HILLS: I beg to move, in page 35, line 5, after "excuse," to insert:
which in the case of a solicitor shall include any privilege against the disclosure

of communications or documents that would be allowed by a court of law.
I think the meaning and bearing of this Amendment will be obvious. Under the Bill, a person who refuses information without reasonable excuse is subject to a penalty of £50, and a further penalty of the like amount for every day, after judgment for that penalty has been given, during which the refusal continues. These are very heavy penalties, and I am sure the House will agree that a witness in a matter of this kind who is asked to disclose documents which no court of law could compel him to disclose ought not to be subject to such penalties. I may be told that the matter is covered by the words "reasonable excuse." They may cover it or they may not, but here you have a professional man who has the interests of his clients at heart. It is not in his interest to conceal information; he has no object in keeping back any facts that the Special Commissioners may want; but he feels bound by the honourable practice of his profession to preserve his client's secret. I suggest with some force to the Attorney-General that it would be a good thing to define in clear words the position of a professional man in this matter, and to say that, in the case of a solicitor, he should not be compelled to disclose documents which a court of law would not oblige him to disclose.

7.23 p.m.

The ATTORNEY-GENERAL: I appreciate, of course, the grounds on which my right hon. and gallant Friend has moved this Amendment. but I suggest to him that the words "without reasonable excuse," which occur in the Schedule, are a complete and sufficient answer in case of a refusal to provide information under the terms of the Schedule. I should have thought that there could be no possible manner of doubt that the right of refusal in a court of law, which is recognised by the highest tribunals in the land, would be a reasonable excuse. If we inserted these express words dealing with a solicitor, we should run a very great risk of narrowing the construction which could be put on the general words "without reasonable excuse." Of course, one cannot define at once what exactly would be held to be a reasonable excuse; anyone can suggest borderline cases; but there would be no doubt at


all that the ordinary protection that can be claimed in a court of law, whether by way of a solicitor's privilege or otherwise, would be a reasonable excuse as provided in this paragraph of the Schedule, and, therefore, I am very loth to insert words which would throw any doubt on that matter. For this reason, and having regard to what was said on the previous Amendment as to the Special Commissioners not being a body whom anyone really suspects as likely to act, or seem to act, in an improper or oppressive way, I hope that my right hon. and gallant Friend will see his way not to press his Amendment.

Major HILLS: In view of the clear statement of the Attorney-General, and of his assurance that the honourable profession in which I passed a good part of my life will not be under any penalty under the Clause, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Amendment made: In page 35, line 18, leave out paragraph 11.—[The Attorney-General.]
Bill to be read the Third time upon Friday, and to be printed. [Bill 147.]

Orders of the Day — MALTA (LETTERS PATENT) BILL [Lords].

7.28 p.m.

Order for Second Reading read.

The SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): I beg to move, "That the Bill be now read a Second time."
This Bill comes from another place, where it passed through all its stages without a Division, and it is now my duty to explain its provisions to the House as briefly as possible, to listen to the views expressed in different parts of the House, and to reply to them as far as I can. The Bill has two main objects. The first is to restore the powers which the Crown possessed relating to the Constitution of Malta, from the time when Malta became of its own wish and volition a British Colony more than 130 years ago until the year 1921—to restore to the Crown its powers to change the Constitution of Malta from time to time, if circumstances seemed to dictate that it would be wise

to do so, by Letters Patent. The second object is to validate all Ordinances promulgated by the Governor of Malta, with the approval of His Majesty's Government in the United Kingdom, since the second suspension of the 1921 Constitution, which suspension took place in the autumn of 1933. In the Colonial Office we take the view that there is no doubt that these Ordinances are constitutionally and legally valid; but, as they have been and are being challenged in the courts, we want to avoid wasteful and expensive litigation. I wish to make it clear that, if some court could be found to declare them invalid, the Government would be compelled to come to Parliament the very next day to validate them by special emergency legislation. The Maltese Courts, both of first instance and appeal, have already decided that they are valid, but we do not want an endless stream of cases ending in appeals to the Privy Council, such as the one now being brought by Lord Strickland about his advertisements which disfigure the beauty, the amenity and the historic dignity of that wonderful Island. The validating Clause of this Bill, however important, will, no doubt, be considered by the House as much less significant than the first operative Clause, which restores the power of the Crown to alter the constitution of the Island from the form as it was before 1921.
The Constitution of 1921 was set up, like most Colonial Constitutions, by Letters Patent. How, then, is it that it requires an Act of Parliament passed by both Houses to restore the power of the Crown? It arises out of facts which are part of our legal history, and there are two quite celebrated cases where judges have decided at Common Law that this procedure of a new Act of Parliament is required in certain cases. The first case goes back many years. It was one of the many celebrated judgments of Lord Mansfield who, in the case of Campbell v. Hall, arising out of changes made on the advice of one of my predecessors in regard to the Constitution of the Island of Grenada in the West Indies, gave the judgment that, once the Crown by Letters Patent had created a legislative assembly with power to make laws, it had parted with its prerogative right to legislate and could not resume the right unless and in so far as that right had


been expressly reserved in the Letters Patent. A similar case was that in re the Bishop of Natal, where it was decided by our courts that the Crown lost its prerogative rights when it had granted representative institutions. In most recent Colonial Constitutions this right has been expressly reserved, but in the Letters Patent setting up the new Constitution of Malta in 1921 they were not so reserved and, consequently, that Constitution cannot be altered in any way except by an Act of Parliament re-empowering the Crown to do so.
The 1921 Constitution of Malta was admittedly experimental and was a form of Constitution then fashionable as the result of the famous Montagu-Chelmsford Report in regard to India known as dyarchy, and it was one of the first of several experiments in, dyarchy. In order to adapt the principles of dyarchy to the peculiar conditions of Malta, the 1921 Constitution provided for the creation in Malta, a small island, with her smaller neighbour, Gozo, approximately of the area of the Isle of Wight, of not fewer than five councils, an Executive Council, a nominated Council, a Privy Council, a Legislative Assembly and a Senate. That was a very highly complex machinery of government. The idea behind it was to give the Maltese electorate responsible self-government in what were to be regarded as purely local internal affairs, and to reserve to the Governor full control of the affairs which concerned Malta as an Imperial fortress and naval base—the star and key of the whole of the Mediterranean—involving of course, all external affairs.
Those who have followed the history of the evolution of Dominion status and the like know, while it sounds very easy to divide internal from external affairs in theory and on paper, how difficult it sometimes is in practice. In Malta, it was found, as the result of the experience of this complex Constitution in 1921, extremely difficult to draw a clear line between the two sides of the dyarchy and to maintain them distinct, but for some time the experiment continued, until in 1931 the then Government, for which hon. Members opposite were mainly responsible, suspended that Constitution in consequence of the acute clash which had arisen between the Maltese Government, under the leadership of Lord Strickland, and the Ecclesiastical authorities. I well

remember the discussions in this House when the Government of that day, to which I was opposed, suspended the Constitution, and the issues that were raised were reminiscent to my historical mind of the Constitutions of Clarendon and the reign of Henry II in this country.
However, after two years' suspension of the Constitution the National Government in the summer of 1932 restored the 1921 Constitution, but restored it with certain clear understandings given in this House and in another place, and with a clear understanding given to the Maltese people and to the Governor of Malta. That clear understanding, which was one of the fundamental conditions under which the Constitution of 1921 was restored, was a clear understanding in regard to the language question. There is no subject of more acute controversy in Malta than this language question, and the understanding was that the teaching of Maltese and English should continue and be developed in the elementary schools. That was a principle to which we and very large sections of the Maltese people, who are very proud indeed of their ancient language, attached the greatest importance. The other party, the party opposed to Lord Strickland, tended to depreciate the value of both the ancient Maltese language and of the English language, and preferred the development of the Italian language. As a result of the election when the Constitution was restored, the party opposed to Lord Strickland was returned by a majority at the polls, and from the very start, the new Ministry of that party set themselves, we say deliberately, to evade the very express conditions under which the Constitution was restored in regard to this all-important question of language.
However, an effort was made to come to compromises, understandings and the like, but it was quite clear in the course of a few months, after the extreme clash of opposing political parties rallying round opposing cries on this language question, that extreme political vindictiveness and bitterness on both sides was being introduced, and in the autumn of 1933, after 15 months' retrial of the 1921 Constitution, the Governor, on the authorisation of the then Secretary of State for the Colonies, again suspended the Constitution, and


for the last two-and-a-half years it has remained suspended, and the whole functions of government have been exercised by the Governor alone, the Governor, of course, being responsible to this House through whoever occupies my position. His Majesty's present Government have decided that they cannot in present circumstances contemplate the restoration of the 1921 Constitution, and they take the view that indefinite continuation of the rule of the Governor, without either a Legislative or Executive Council, is equally undesirable, and they desire to have a new Constitution. The only way in which they can have a Constitution capable of development and change in the future, as experience shows desirable, is by resuming the power which the Crown possessed up to 1921 to amend the Constitution by Letters Patent.

Mr. MORGAN JONES: The right hon. Gentleman used the words, "The Government cannot in present circumstances restore the 1921 Constitution." Do I understand that that means that the Government would, in other circumstances, restore the Constitution?

Mr. ORMSBY-GORE: No, I want to make that clear. We regard the dyarchic Constitution of 1921 in the light of our experience of the two suspensions. We do regard that as absolute, and believe that the Constitution of Malta in future must be upon unified lines rather than upon dyarchic lines. I want to make that clear. We do not contemplate restoring the 1921 Constitution, but we do contemplate the evolution of new Constitutions in Malta from time to time as circumstances permit. We want this Bill in order to resume the power to do what we can do by Orders in Council—vary the composition of the Legislative Council and the Executive Council from time to time as circumstances permit, and as this House expresses, through the control of the Secretary of State and its usual representations, the wisdom of so doing.
We desire to give Malta a new Constitution, but we cannot do so. We can only continue this formula which we have to-day, namely, ordinances issued by the Governor under the emergency and suspended powers, or restore the 1921 Constitution, and we do not want to do

either. Indefinite continuation of the rule of the Governor without either a Legislative or Executive Council is, in the view of His Majesty's Government, undesirable and incompatible with the admittedly high level and culture of the Maltese people. We hope to be able to frame a new Constitution—and this time a Constitution which can be amended and evolved from time to time as circumstances become opportune, instead of as at present being tied to the rigid Constitution of 1921, and all the defects that that Constitution has been shown by experience to possess.
We say, at first, that the unofficial element in the new council will be nominated, and as and when circumstances permit it is our hope that some elements of representative government can be introduced. Let me make it clear that whatever the exact form of Constitution we decide, in consultation with the new Governor of Malta, to adopt, I have no intention of allowing the Crown Colony type of Constitution which throws on me in Malta as elsewhere the major ultimate responsibility, to become stagnant. In public health, scientific agriculture, cultural development and financial stability, and all that will develop the national life of Malta, I am confident that the Maltese can be assured that the new Constitution, as during the last two-and-a-half years, will enable great strides forward to be made in their welfare. Malta and England are rightly proud of their mutual and intimate association for over a century. Malta down the centuries has had a stirring and gallant history. It is full of magnificent monuments and buildings of this great past. Firm, good and progressive government must be maintained in a colony which is of immense importance to this country in the scheme of Imperial Defence, and in the interests of a loyal and proud people with its special traditions and culture. I hope that it goes without saying that England in the future will respect, as she always has in the past, the religious liberties of the people of Malta and the special position of the Roman Catholic Church as the religion of the island, as established by law.
I ask the House, therefore, to pass the Second Reading of this Bill not in any spirit or desire to restrict the free expression of opinion in Malta or


anything of that kind, but in a true spirit of good will to the people of Malta, and with the assurance that this House will ever be mindful of their welfare and concerned with their progress and with the future development of the Maltese Constitution.

7.52 p.m.

Mr. MORGAN JONES: I beg to move, to leave out the word "now," and at the end of the Question, to add the words "upon this day three months."
The right hon. Gentleman has commended this Bill in terms which are wholly inadequate. Clause 3 has not even been honoured with a reference, and this Clause deals with the abrogation of Sections 1 to 4 of the Malta Constitution Act, 1932, Section 4 of which is of particular interest to hon. Members on this side of the House inasmuch as it has relation to the Trades Union Council. The right hon. Gentleman did not deign to say one word about it. The right hon. Gentleman must not assume that pleasant platitudes addressed to the people of Malta can be deemed in any way as an adequate justification for the very grave step which the House is asked to take to-night. The right hon. Gentleman has made it clear, and his colleague in another place has made it more clear, how grave is the step which the Government are taking to-night. I submit to the right hon. Gentleman and to the House that, before this step is formally endorsed by this House, it ought to be justified by the Government right up to the hilt. If I lay down that test, I submit to the right hon. Gentleman that the testimony he offers is wholly inadequate. That this is a grave step is beyond doubt. It has been suggested in another place that this Bill is intended to place Maltese affairs upon a regular and permanent basis. I invite the House to note that "permanent" was the word that was actually used. "Regular and permanent basis" were the exact words which appeared in the speech of his colleague in another place. I gather from the right hon. Gentleman that he is surprised at the use of that language. Very well, which of the two spokesmen of the Government is the House to accept as being authentic? One can behold one voice in this House, and another voice in another place, and apparently there is no agreement or understanding between the two voices.

Mr. ORMSBY-GORE: I think that my Noble Friend in another place used the word "permanent" in the sense that permanently Malta should have a unified constitution and not a dyarchic one, and that is the understanding in which the word "permanent" is now correct. To say that we are now proposing for all time to lay down an unchangeable constitution for Malta is not correct, and I hope I made it quite clear in my speech that it is not the case.

Mr. JONES: I think that I shall have to refer to that point in detail presently, because I rather think that the right hon. Gentleman cannot have read the speech of his colleague in another place. When this Bill was first submitted it was acknowledged by the Government spokesman—and indeed the right hon. Gentleman has done the same here to-night—that in the Constitution of 1921 there was set up not representative government, but responsible government with certain reservations. I gather that the contention of the Government to-night is that the Constitution of 1921 was vitiated by two flaws, first that there was no power of reserve to the Legislature, and, secondly, that there was no power to revoke the Constitution as a whole. It is because of the so-called flaws in the Government point of view that the Bill has been introduced to remove those limitations.
The statement was made when the Bill was introduced in another place that as soon as the Bill is passed the Government intend to submit to His Majesty a proposal that the new powers derived from it shall be utilised to effect some modification in the existing constitutional position. The question therefore that arises for us to-night is, what do these modifications signify in form and in fact? The right hon. Gentleman seemed to imply that, anyway, the Government do not contemplate Crown Colony government in the strictest and narrowest interpretation of that phrase. I am glad to have that assurance, though I confess that I do not feel too reassured even now upon the matter. The country was told that as soon as possible, at a later date not specified, a more liberal system of government would be introduced, and this more liberal system is defined and implied by the right hon. Gentleman to-night as a government under a Governor with an executive


council. The Executive Council, of course, is to be composed of an official element and an unofficial element. It was made abundantly clear by the right hon. Gentleman that the Executive Council is only to be an advisory body. The country was informed a little more fully through the medium of the speech of the Under-Secretary than we have been informed here to-night as to what seems to be in the mind of the Government concerning the future direction of affairs.
We were told in the speech in another place that the Government propose to associate a number of Maltese of standing and experience. What does "a Maltese of standing and experience" imply? I do not know how you are to measure his standing, whether he is to be one who will get up when told to get up, and sit down when told to sit down. He is clearly a person who is to represent nobody but himself, and he is to be called up higher by the Governor if the Governor thinks fit. He is to be a nominated person. We were told in the speech to which I have referred that this council was to be a proper and regular channel through which unofficial opinion might be expressed. That was the view expressed in the other place as to the appropriateness of this form of government. It is true that the Under-Secretary said that it was to be of no more than an interim and provisional character. The right hon. Gentleman opposite underlined that point, in order no doubt to encourage our hopes as to the future. When one read those words naturally one was less disconcerted than one might otherwise be, but our hopes were speedily dashed, for all that the Members in the other place were told was that the Government looked forward at some unspecified time to establishing some form of representative government. But we had a little more precise idea given to us as to what this form of government implied to the mind of the Under-Secretary. Let me quote his words:
By responsible government I mean not responsible government with Ministers, but a Legislative Council comprising, in addition to official members, a number of unofficial representatives chosen by popular election.
That is the form of legislative council which was accepted by the Government spokesman in the other place as a proper

and regular vehicle for the expression of Maltese opinion. After he had indicated the terms of the forthcoming proposals, all that the Under-Secretary could hope for was that the proposal would find a measure of local acceptance.
It is quite clear that the step we are taking to-night is a complete departure from the situation as it existed in 1921. The question, therefore, arises, why is it that the Government are taking this step? What are the grave reasons which must be present to their minds before they take a big step such as this? Surely in this matter we have some experience to guide us, even in respect of Malta. The Under-Secretary said that we must proceed step by step and learn from the lessons of the past. What are the lessons of the past There was an Advisory Council set up in Malta over 100 years ago, in 1835, and I believe I am well within the truth when I say that that Advisory Council proved unsatisfactory and unacceptable to Maltese opinion. It was removed. Parliament took steps to change it. It must have been conclusively proved to the mind of the Government of the day, if not to the minds of the Maltese people, that a change from that form of government was necessary. Representative government was introduced over 50 years ago, in 1885, and that representative government proved not a complete success. I am putting it mildly by saying that. Experience, therefore, gives us guidance, first, upon the question of an Advisory Council, which is now proposed, and, secondly, upon the effectiveness or otherwise of representative government.
In 1921 Parliament took the very big step of carrying a Constitution, through the medium of which not representative but responsible government, with certain reservations, was given. We are asked to-night not to hark back even to the 1885 provision but to the 1835 position, 100 years ago, without the right hon. Gentleman taking the trouble of explaining adequately why the Government ask the House to take such a, step. Let me confine my argument to what has taken place from 1921 up to the present time. From 1921 to 1930 responsible government was in operation in Malta. Can anyone say that responsible government in Malta from 1921 to 1930 was a complete failure
The right hon. Gentleman will,


quite properly, retort that in 1930 the Government of which I was a very humble member suspended the Constitution, but with the exception of the crisis which grew up in 1930 I maintain that in the preceding years it could not be contended that responsible government was a failure. In support of my contention I will quote a speech, not from anyone on my own side but from the right hon. Member for Sparkbrook (Mr. Amery). On 26th June, 1930, he said:
While I entirely support the action of the Government, I do most sincerely hope they may find a way out of this difficulty which will enable the Constitution of Malta to come into operation again at the earliest possible moment. It would be a great misfortune if this wide measure of self-government—this really very daring experiment in self-government which was conceded to Malta less than ten years ago, and with the concession of which I was privileged to be closely associated—should be treated as having failed. Apart from the intervention of this issue, I do not think anybody can suggest that the Maltese have shown themselves unfitted for self-government. They have had plenty of liveliness in political contests; so have we. But there has never been a liveliness directed against the Empire or this country, and in spite of that liveliness the Island of Malta, has, under self-government, made very satisfactory progress indeed."—[OFFICIAL REPORT, 26th June, 1930; col. 1477, Vol. 240.]
On that occasion the right hon. Gentleman was speaking officially on behalf of the Tory party from this side of the House. The Constitution was suspended in 1930. I am not exaggerating when I say that in 1930 the controversy was mainly between the Church on the one side and some individuals on the other, important individuals, and the Maltese people as a whole had probably nothing to do with it. The Constitution was restored in 1932. Then came the language difficulty and the Constitution was suspended again in 1933. I took a pretty lively interest in the controversy in this House in 1934 on the Colonial Office Vote. I said then what I repeat now, that the Colonial Secretary of that day took a step in regard to the language question in complete contravention of the recommendations of the Askwith Commission. On page 166 of their report the Askwith Commission recommended:
That if and when the Secretary of State for the Colonies is satisfied that sufficient expression of opinion is given in support of an alteration in the elementary schools and that there is a desire on the part of the people in the Island for an alteration we consider that the alteration should take place.

I do not know whether he took trouble to find out what the views of the people of Malta were. At any rate, the Constitution was suspended in 1933 and it has been suspended ever since. When the people of Malta exercised the rights of self-government it can be fairly contended that they conducted themselves with some credit. It was argued in support of the suspension of the Constitution in 1933, and it has been argued on this occasion, that these changes came about partly because of the failure of the Maltese people to govern their financial affairs properly. My reading of the situation does not justify that observation. I think I am well within the truth when I say that when the National Government went out in Malta and its functions were taken from it, that Government left a surplus in the Treasury of revenue over expenditure of £150,000. There was not a single penny of public debt outstanding. Therefore, it is not fair to say that these people have brought about a state of financial chaos in Malta, as was positively stated when the right hon. Gentleman's predecessor spoke in 1934.
It cannot, therefore, be the truth that this situation has come about through any financial obliquity on the part of the Maltese people. It was said in the other place that it was time the poor Maltese had a change, a little rest from electoral controversy; that they should have a rest from elections and political dissension. Is that a. good reason for suspending the Constitution? I shall have been a Member of this House 15 years next month, and I have fought seven elections. That may be an argument for a rest, but I do not think that it is an argument for suspending the Constitution? Is that not a. flippant reason to advance for these proposals? It gives you the feeling, rightly or wrongly, that there is some reason behind all this which the Government have not given; that they have not given us the real truth of the matter.
It is suggested that the position of affairs in the Mediterranean justifies this step. Let us look at that contention for a moment. The Maltese people, as a matter of fact, under the Constitution of 1921, have nothing at all to do with defence. It never was a part of their task, it was specifically reserved to the Governor, and through the Governor to the Imperial Government, and if you restore the Constitution as it was in 1921, it will


not give to the Maltese people a single iota of power in regard to defence. Clearly that cannot be justified as an argument in favour of abrogating the Constitution. If this proposal cannot be justified on financial grounds, if the electoral argument is flimsy and if the argument of defence does not apply, can it be that the loyalty of the Maltese people is in question? I have quoted from the right hon. Member for Sparkbrook, and when he referred to the loyalty of the Maltese people his remarks were applauded by the Colonial Secretary. In addition, there was a specific acknowledgment in another place of the loyalty of the Maltese people by the Under-Secretary of State, in these words:
His Majesty's Government not only believe they know that the vast majority of the people in Malta are absolutely loyal to the Crown and Empire to whatever party they belong.
Clearly then this step is not being taken on the ground of any alleged disloyalty on the part of the Maltese. If it is not taken on the ground of finance or because the Maltese have failed to do their job, on what ground is this step taken? I fail to understand why the Government are taking this step. It has been suggested that the Maltese Constitution is a little too complicated. In that case the obvious remedy is to make it less complicated, not to be like petulent children—if you do not understand a thing, smash it. That is what the Government are doing. There are five instruments of Government in Malta. Let me see if I can remember them. There is the Senate, the Legislative Assembly, the Privy Council, the Governor, and organisations connected with the Governor. Malta is not a very big place. Suppose you got rid of the Senate, would the Maltese lose a lot? It would be a terrible thing if it should lose its Senate. There is the Privy Council, which I think does very little. If it went no one would shed any tears. If the machinery is too complicated simplify it, not smash it, as you are doing.
What is going to be the effect of all this on the Maltese people? To us it may not appear very impressive—Malta is only the size of the Isle of Wight, a glorified county council—but to the Maltese people it means very much. It cannot fail to be a great affront to them if they are put back not to the position of 1921

but to the position of 1835, with a very plain indication that not for a very long time, if at all, will the Constitution of 1921 be restored. I am getting very disturbed about these indications of a growing tendency in the Colonial Office in regard to various parts of our Dominions. We have first of all Newfoundland—first not in order of time, but in order of magnitude. The conditions there, I know, were very grave, but we argued then that the abrogation of the Constitution even in those conditions was too big a step to take. There has been a much smaller one at the other extreme. There has been a successful attempt to abrogate the Constitution in the municipality of Suva in the Fijis. Little straws show which way the wind blows. There have been attempts to express hostility to the functioning of self-government if it operates in a way which the Government do not like. When it operates in a way which does not serve the purposes of the Government, then it is necessary to change the government.
Here we have a third instance—Malta. I admit that the Colonial Secretary's point is quite fair. Malta is an important strategical position, but so far as safeguarding of actual strategic matters are concerned that is not in the hands, and never has been, of the Maltese Government. If you do this and withdraw from them completely, formally, and by law any chance of a restoration of the 1921 position, you will not only take a very big constitutional step but you will, in my judgment, alienate people who might easily become very valuable friends. I do not think that you can afford to alienate these people, and even if you could I should still argue that you ought not to do this. These people attach great importance to the powers they possessed in 1921. For nine years they did their job without any complaints. There have been complaints since 1930, but in the intervening years from 1930 to the present time they have had no chance of proving that they have learnt by bitter experience.
We take the strongest possible objection to this proposal and, speaking for my friends and myself, we should like the Colonial Secretary to explain in a little more detail the real reasons for this step on the part of the Government. If the Colonial Secretary when he comes to


reply will give us the reasons why the Government are suspending these four Sections of the 1921 Act, we shall be glad indeed. We take our stand once again in this matter on the ground of firm principles. These people have the right to be consulted as to the conditions under which they are called upon to live. The Governor may choose admirable people, he may choose excellent advisers, but what authority will those advisers have unless the people have had some voice in choosing them? Therefore, it is on the broad ground of democratic principles, as well as in the conviction that no adequate case has been presented for this step, that I submit my Amendment to the House.

8.26 p.m.

Mr. de ROTHSCHILD: It is now, as the Minister said, two and a-half years since the Constitution of Malta was suspended for the second time, the Maltese Ministry dismissed and a state of emergency declared by the Colonial Secretary. Since then Crown Colony administration has been set up and Crown Colony administration of the most severe type. This state of emergency has been stretched to cover as much as two and a-half years, and I want to submit that this is really a standing reproach to the Imperial Government and to successive Colonial Ministers. A years ago, the Colonial Secretary, who is to-day Dominions Secretary, said in this House that a state of emergency could not continue indefinitely. They why has this state of emergency been allowed to continue for so long? It is, I believe, because Ministers could not decide what permanent measures to adopt for the future government of Malta, and the emergency lasted as long as the indecision in the Ministers' minds. In fact, it has taken a succession of four Colonial Secretaries to consider this problem, and meanwhile Malta has been subjected to a one-man rule. It has been governed by ordinances, and many of these have been of doubtful validity.
To-day, the Colonial Office comes to the House and asks us to declare all these ordinances as being valid, and to validate every one of them. Clause 2 of the Bill clearly shows that the Minister doubts the validity of many of these ordinances, and what he asks for is a retrospective declaration of validity. I do not pretend

to say that this is altogether a precedent. I believe that it happened before, in 1932, on the subject of the Island of Malta also, but surely that ought to have been a lesson to the Colonial Office at that time and they ought to have given their instruction to the officers in Malta to enact only such ordinances as they knew would be valid and could be validated without the authority of this House. In any case, the Government certainly had no excuse for continuing to exercise such doubtful powers for so long. After all, we know they have had a large and docile majority, and it would have been easy for them to have introduced proper legislation which would have given the Governor of Malta any powers they saw fit. So much for Clause 2 of the Bill.
The main object of this Measure, as the Minister has said, is contained in Clause 1. It is the policy of the future, and it is with that policy that we on these benches are mainly concerned. Let me say at the outset that we are in no way prepared to accept a Measure which merely validates what has been done and continues the present system of government. What is essential in Colonial affairs is continuity of policy. I venture to submit that in Imperial and Colonial affairs continuity of policy is even more important than in foreign affairs. During the last 100 years the British Government have shown that sense of continuity, and it is that enlightened policy, carried out by the Imperial Government, which has endeared this country and the rule of this country to so many of our Dependencies which encircle the world. As a result of that policy British Colonies and Dependencies have kept their attachment to the Mother Country and to the Crown.
Therefore, I suggest that it would be most regrettable if there were now a reversal of this policy with regard to the Island of Malta. For Malta our ultimate aim should be the same as for all the other Colonies, and that is to establish in due course representative and responsible government. In my view the restoration of responsible government in the immediate future is inexpedient, and here I may say that I differ from the official Opposition. After all, the official Opposition have agreed that they suspended the 1921 Constitution, and to-day, as far as I can gather from their speeches,


it is to that same 1921 Constitution, which was twice suspended, that they wish to return.

Mr. MORGAN JONES: It was not twice suspended by us.

Mr. de ROTHSCHILD: It was twice suspended by this House. I subscribe on this question to the advice and the opinion of Lord Askwith, who, while Chairman of the Royal Commission which reported on the 1921 Constitution, urged the Government to restore the 1921 Constitution with small alterations in regard to the judiciary; but only the other day in another place he supported the view of the Government of to-day and urged that responsible and representative government should be given to Malta again by stages, and he did not wish that the 1921 Constitution, the return to which he had advocated after the suspension of 1930, should be returned to at the present time. His view is indeed not surprising when one thinks that there were two successive attempts to carry out the behests of the Constitution of 1921, and that both of them failed. The factors which caused those breakdowns are still very powerful to-day.
The clerical influence will always be very strong in Malta. We all remember the effect of the Bishop's Pastoral in 1930. It prevented the working of representative institutions, and although Lord Askwith in 1931 thought that no such pastoral would be issued again, there is no certainty that another pastoral may not again interfere with the working of representative institutions. Another point is that the clerical element and the Italian movement are to a great extent identical, and in the present international and European situation we cannot ignore that fact. We cannot forget that one of the greatest achievements in the masterful policy of Signor Mussolini has been to gather the policy of the Vatican into the orbit of his own Italian policy. The Vatican has not shown itself out of sympathy with the Italian conquest of Abyssinia.

Mr. LOGAN: What grounds has the hon. Member for saying that?

Mr. de ROTHSCHILD: I assure the hon. Member that I am only stating the historical facts. I do not wish to make

any accusation or any criticism. I merely say that the Vatican has shown that it was not out of sympathy with the
policy of Signor Mussolini. I am not saying that in any derogatory manner. I simply put it forward now that when Signor Mussolini talks about "Malta Nostra," as he has done, he has the sympathy of the Vatican and the active support of its instrument in Malta. There is another important consideration which has always influenced the form of government in Malta, namely, the importance of Malta as a strategic point, not only as a factor in Imperial defence but as a factor in world peace. As far back as 1901 Joseph Chamberlain pointed out that this was a great Imperial fortress. We say that a system of government ought to be devised which will reconcile two factors—the necessities of Imperial defence and free representative institutions for the Maltese people. It is the duty of the Imperial Government to devise such a system and I trust, although it may be inexpedient at the present time to restore responsible government to Malta, the Imperial Government will make that restoration its ultimate aim. I sincerely hope that that is the Government's ultimate intention, in spite of the disheartening utterances made in another place by the Noble Lord who represents the Colonial Office.
The hon. Gentleman who spoke for the Opposition has referred to those speeches, and I would like, with the permission of the House, to refer to them in another aspect. The Under-Secretary spoke of the eventual establishment of some form of representative but not responsible government. He said that on two occasions. I trust that he was speaking only of the immediate future. Malta has known and has worked representative government for centuries. The Letters Patent of 1887 gave Malta a council of government in which six members were nominated and 14 were elected. Are the Maltese to remain at that point for ever? We cannot deny to them the hope of responsible government because of two unhappy failures. Such a policy would, I submit, have the most serious reactions. The first effect would be to encourage the pro-Italian movement and discourage the great body of the Maltese people. These are, practically all, loyal to the


British Crown, but they are strongly patriotic and proud of their national possessions and traditions.
Therefore I sincerely trust that the Government's ultimate aim is still responsible government for Malta. recognise that it may be necessary to proceed by stages, and I should like the Government to be more definite with regard to the stages by which it is intended to advance. I understand that the first stage is to be the setting up of a council of nominated members to assist the Governor in an advisory capacity. I hope that this stage will be short-lived, and also that this council will soon consist mainly of elected members. That would be no more than a restoration of the constitution of 1887. I turn to the more immediate future. Whatever machinery of government is set up, I trust it will be liberal—liberal with a small "1." I trust that it will be more liberal in operation than the machinery of the past 2½ years. Even if it is a despotism, I hope it will be an enlightened and benevolent despotism. Above all I hope that more freedom will be given to the expression of opinion. I wish to see freedom of opinion throughout the island. In another place Lord Strickland revealed that there were restrictions on free speech.

Mr. DEPUTY-SPEAKER: I must remind the hon. Member of the rule concerning references to proceedings in another place.

Mr. de ROTHSCHILD: I was not quoting from a speech but was merely stating generally what had been said there, and I think I am entitled to do so, but I bow to your Ruling, Mr. Deputy-Speaker. I understand, however, that public meetings both inside and outside the fortress have been suppressed for two years, and that political meetings are not permitted by the police inside private premises. I learn also that last December there were protests against the drastic muzzling of the Press. That is a state of affairs which cannot be allowed to continue. Apparently, only one person has freedom of speech in Malta and that is Signor Mussolini, who nightly broadcasts Italian propaganda through the thousand wireless sets recently installed
in Malta. The Under-Secretary in another place congratulated the Govern-

ment on installing those sets. What have they been used for chiefly? For the unrestricted dissemination of Italian news and the distortion of news. Are the Government to be congratulated on that achievement? Yet although Signor Mussolini is free to broadcast his views and to inflame the population of Malta at his wish, the Maltese themselves are not free to protest against it.
Last December such a protest was attempted. A public meeting was held, and the loyal Maltese cried "Long live England." They were arrested by the police, and the Union Jack was torn from their hands. The police, no doubt, were acting legally, but what a state of affairs in a British Dependency. What justification can there be for such a suppression of free opinion, both on the platform and in the Press? Why suppress both loyal and disloyal opinion? I am fully of opinion that the Administration should real drastically with Italian propaganda. It is the duty of the Imperial Government to protect the people of Malta from any outside interference such as that, but, after all, what we must think of is that we must also free loyal Maltese from illiberal restrictions which prevent them from giving expression to their just grievances and aspirations and hamper attempts to combat the propaganda from Italy.
I hope the right hon. Gentleman will give us the assurances for which we ask. We are not prepared to embarrass him to-night, and we are prepared to support him in this Bill, provided he gives us these very necessary assurances. But in all legislation affecting Malta let us bear in mind these two essential factors: Malta is a fortress, which has for over 100 years guarded the safety of the maritime highway of the Mediterranean in the interests of peace, and this should continue to be so, but do not let us forget that we are also responsible for the political well-being and contentment of a loyal, civil population.

8.48 p.m.

Mr. LOVAT-FRASER: It is a remarkable and interesting fact that so many of the islands in the Mediterranean have been, at one time or other, under the control of the British Government. The Balearic Islands—Majorca, Minorca, and Iviza—which now belong to Spain, were once British; Corsica, which now


belongs to France, was once British, and if Napoleon had been born a few months earlier, he would have been born a British subject; the Ionian Islands, which now belong to Greece, were once under the British Crown. A year or two ago, when I was in Corfu, the leading Ionian island, I was interested to see that the principal ornament of the Governor's palace was a very fine portrait of our King George IV. Having parted with these islands, we still have two very important islands, the Island of Malta, of which we have been talking to-night, and the Island of Cyprus. These two islands, which are on the way to India, are vital to our control of the route to India and for the purposes of defence. The Island of Malta is a small island, but it has created an amount of attention in the world during its history far in excess of its natural importance. As the Minister said, the Island of Malta is about the size of the Isle of Wight, and the population of Malta is equal to the population of Portsmouth and Southsea.
The Bill which we are now discussing is going to give to the Crown the full and undoubted right to legislate for Malta by virtue of the Royal prerogative. To that I take strong exception, and with most of what was said by my hon. Friend the Member for Caerphilly (Mr. Morgan Jones) I agree. The result of passing that provision will be that the Government of Malta will become practically Crown Colony Government. The Governor has complete control of Malta. He is a dictator, and the people of Malta have no control over his decisions or his actions. As the Noble Lord the Under-Secretary who dealt with this Bill in the House of Lords said, the Government is a somewhat drastic form of government. Another Noble Lord, who is very well known as having occupied a prominent position in Malta and who has been for many years past devoting his life to the welfare of Malta, said, quite truly—

Mr. DEPUTY - SPEAKER: I must remind the hon. Member that the only exception to the rule against discussing speeches in another place on the same subject is when they are in the nature of official pronouncements by Members of the Government. We must not discuss debates in the other House.

Mr. LOVAT-FRASER: I will continue on the line which I was following, without, I hope, breaking the Rules of this House. I have the strongest possible objection to the Governor having this complete and despotic power. It has been said that it is the intention of the Government gradually to introduce a period of reform which will increase the power of the people of Malta to deal with their own affairs. An Executive Council is going to be appointed, comprising officials and nominated non-officials. That will be, if carried out, the only mitigation of the despotic rule of the Governor which will be permitted, at all events for some time to come. It is very important that we should keep right with the people of Malta. It would be of vital importance to us, if we were engaged in war, that we should have, in the Island of Malta, situated as it is in that part of the Mediterranean, a friendly people. It is, as has been said, a fortress on the way to India. One of Napoleon's great mistakes was to disregard and ignore the feelings of the people of Malta, which led them to turn against him and, in conjunction with the British, to expel him from Malta.
The Maltese are a very proud people; they are proud of their history and of their race, and we have to remember that Malta is not a ceded territory but a sister nation in the great Commonwealth of nations under the Crown of England. We are not entitled to treat Malta as a possession that we have conquered. Malta is in very much the same position as Scotland, and we must remember, too, that we are dealing with a nation, which joined England of her own accord after we had driven Napoleon out of Malta and taken the City of Valetta. The people of Malta linked themselves with us deliberately, and accepted the brotherhood and kingdom of England. We should do what we can to make a loyal population in Malta. My hon. Friend the Member for the Isle of Ely (Mr. de Rothschild) referred to the Italian propaganda. That is very serious. It is being carried on deliberately, steadily, and very cleverly. Mussolini referred to Malta as "Malta nostra"—"our Malta." Although I have no personal knowledge of the fact, I am assured by friends that in that part of Italy which was formerly Austrian, in the new towns and cities which are


growing up, the squares and streets are given the names of places in Malta.
The idea of ultimately securing this island, situated as it is, is one of the aims of that propaganda. The way to neutralise it is to treat the Maltese in such a way as to secure their loyalty to the Throne. A very proud people, they have a splendid and interesting history. They were originally under the Saracens; from them they passed to the Normans, and for centuries they were governed by the Knights of St. John of Jerusalem, until, finally, they came under the British Crown. From 1090, when they were taken over by the Normans, they had a consilio popolare, a popular council. At intervals during their history they have had this popular council, and one can understand a nation that has enjoyed control of its own affairs in the way that Malta has resenting this Bill. I should like to see the Bill modified in the direction, of giving greater power to the people of Malta. We want them to have more control immediately in their own affairs instead of the proposed system of government by a form of dictatorship.

8.57 p.m.

Mr. A. HENDERSON: I agree with a good deal of what was said by the last speaker, particularly as to the historical aspect of the Maltese question. It is true to say that the Maltese were never conquered by this country. The French forces in 1800 were driven out of the island by the joint efforts of the British and the Maltese troops. I hope that the Government realise the fundamental change which they seek to bring about in this Bill. When I first took it up it seemed to me to be of little importance. It is a short Bill of two Clauses and, on the face of it, very innocuous. When I looked at the 1921 Constitution, however, and compared it with the proposals of this Bill, it became clear that this is a Measure of a very revolutionary character. That may seem a strange thing to say about the Government, because so far they have not done anything of a particularly startling nature, except perhaps in the international sphere. When the Minister moved the Second Reading of the Bill he did not do his case justice with the explanation he gave. May I remind him that he is endeavouring to do something for which, so far as my limited knowledge goes, there is no pre-

cedent? Not only is he trying to put the clock back, but he is seeking permanently to deprive a part of the British Commonwealth of Nations of constitutional powers almost equivalent to those of Dominion status which it has enjoyed since 1921. I know of no case in the history of this country where an attempt has been made to deprive a Dominion permanently of the constitution conferred upon it by the Imperial Parliament. That is what this Bill seeks to do in the case of Malta. I should have thought that no Government would have attempted to do any such thing except in the most exceptional circumstances.
I listened to the Minister carefully in order to learn whether any very exceptional circumstances exist to justify this very revolutionary proposal, but I listened in vain. Whether the right hon. Gentleman is in the same position as his leader of having his lips sealed I do not know. Whether there are, as was suggested by the hon. Gentleman who has just spoken, various questions of international policy behind the proposals, I do not know; but even if questions of the balance of power and of Imperial welfare were at stake in the Mediterranean, I have yet to learn that to deprive a proud nation like the Maltese of the right of responsible government and to replace it by what is equivalent to a benevolent form of despotism or dictatorship, is likely to increase their loyalty to the British Commonwealth of Nations. I was disappointed in listening to the hon. Member for the Isle of Ely (Mr. de Rothschild), speaking on behalf of the Liberal party, to hear him suggest that he had not much objection to this constitutional change.

Mr. DINGLE FOOT: Why did the Labour party deprive Malta of its constitution?

Mr. HENDERSON: I have yet to learn that they ever did. What happened in 1930 was that the Constitution was suspended, and it remained suspended for two years. It is one thing to suspend the Constitution and another thing to kill it, and I am sure that my hon. Friend does not suggest that the action of the Labour Government in 1930 in suspending the Constitution deprived Malta of a Constitution permanently. The Minister was inclined to argue that the 1921 Constitution was not sufficiently


flexible. That statement must, I think, have been due to a misunderstanding. Is it not a fact that under Section 41 (6) of the 1921 Constitution the Maltese Legislature were given full power to alter the Constitution, except so far as the reserved points were concerned? It was originally provided that a two-thirds vote was required, and I believe that in 1928 that was altered so as to require merely a bare majority. So far as the non-reserved points were concerned, therefore, there was ample power in the Maltese Legislature to amend the Constitution. So far as the reserved points were concerned, ample power is given by Section 60 to His Majesty in Council to amend, alter or revoke any of them. Taking the two Sections together, it is not correct to say that the Constitution was not flexible and not susceptible to change.
Therefore, I hope that is not the real reason for the suggestion which the right hon. Gentleman put forward. Clause 1 of the Bill does seek to carry out a fundamental change, seeks to revert back to government by Order in Council instead of government by an elected legislature. Objection, I think, can also be taken to Clause 2, which follows the procedure embodied in the Act of 1932, and, in effect, seeks to indemnify the Governor and his advisers in respect of acts which have been carried out since 1932. In the Act of 1932 there was a similar indemnity Clause in respect of executive acts carried out between the years 1928 and 1932, and I should have thought that was definitely undesirable from a constitutional point of view. Are the Government coming periodically to this House to seek approval of executive acts the validity of which are in question? Why did not they learn from their experience in 1932? In the Preamble to the Act of 1932 it is expressly stated:
Whereas it is expedient to remove doubts which have arisen as to the validity of certain of the amending Letters Patent and as to the validity of the Order in Council, Acts and Ordinances hereinafter mentioned
and on looking at the First Schedule to that Act I find that indemnity is to be given in respect of a number of ordinances which were put into force during those years. After that experience in 1932 the Government come back to the House in

1936 and ask for further indemnity in respect of ordinances put into operation during the last four years. I should have thought that hon. Members opposite who follow the profession of the law would at any rate have agreed with us on this side of the House that that is not a very strong case for asking the House to repeat what took place in 1932. To my mind it affords a strong argument against this method of government in our possessions. I suggest to the Minister that it is not sufficient to say that as time passes an attempt will be made to help the Maltese people by increasing the measure of representation on the Council which is to advise the Governor. No matter how much you increase the representation, if the Council is merely advisory you will still, in effect, have a kind of palace government, government by the Governor acting on the advice of his officials. That is inconsistent with democracy. We should not tolerate it in this country. We have made mistakes in the past. Malta may also have made mistakes in the past. The fact that we can point to weaknesses in our own form of democratic government would not be accepted as an argument for turning to a kind of Fascist government, and it is not an argument to say that because the Maltese have made mistakes in the last 10 years therefore they are not to be trusted with a form of self-government.
I hope that hon. Members on this aide of the House will record their protest against this attempt to deprive the people of Malta of a fundamental right—which at any rate is acknowledged in this country—to govern themselves in domestic matters. Even if we look upon Malta from the point of view of our Imperial interests the Minister has admitted that defence and foreign affairs are reserved matters and not within the powers of the Maltese Parliament. Therefore, even though our interests in the Mediterranean might be the reason which is at the back of this Measure it does not seem any very cogent reason for this revolutionary change. I hope that when the Division comes hon. Members on this side of the House will dissociate themselves completely from the proposals contained in this Bill.

9.11 p.m.

Captain ALAN GRAHAM: I think those Members of the House who know


Malta best will agree that there was really no other course open to the Government than to discontinue responsible government there and to legalise both that and the ordinances passed which have been rendered necessary by it. While I am not one of those who believe that the very peculiar form of Constitution evolved by ourselves, a somewhat peculiar people, and suited to our traditions, temperament and climate, is necessarily at all suitable to people with quite other traditions, temperaments and climates, it does behove all of us who have the sound government of our Empire at heart to examine what were the causes for this discontinuance of responsible government. The hon. Member for Caerphilly (Mr. Morgan Jones) complained that those reasons had not been afforded to him. With a people such as the Maltese, nine-tenths of them loyal to the British Crown, industrious, intelligent, and, in the words of Napoleon's Governor of the island, General Vaubois, who was actually defeated by them, "Good natured, receptive to good treatment and easy to lead," why did responsible Government fail? In my view it failed for one essential reason: the ruling elements in the Nationalist party in Malta were not really reconciled to British rule, and thought that they had greater opportunities for their own advancement under an Italian occupation. The geographical propinquity of Italy has naturally exercised a very strong cultural influence upon Malta through its universities, schools, and seminaries for the clergy, and the ex-pupils of these cultural institutions have been—not all of them, but many of them—willing vehicles for the spread of Italian propaganda and of the utterly false Italian propaganda that Malta is Italia Irrendenta.
The Maltese people on the contrary are primarily of Carthaginian stock, and speak Italian partly for the simple reason of their propinquity to Italy, and partly because Italian has been in the past more or less of a lingua franca in that part of the Mediterranean. And these elements of the Italian intelligentsia, together with discontented lawyers, certain of the clergy who were too clever by half to be spiritual, and too ignorant—others of them—to be rational, have formed ready vehicles for this false propaganda. Their real leader was Dr. Mizzi, who has openly avowed his preference for Italian rule

over Malta to British, and the secretary of this so-called Nationalist party has recently been sentenced to three years' imprisonment with hard labour for espionage on behalf of Italy.
With His Majesty's Government or His Majesty's Opposition in Malta composed of elements such as this, I think it is not unreasonable to suggest that responsible government has not been carried on in Malta by people animated by democratic principles. That they should be suppressed for disloyalty is a logical principle followed by many of the Governments in the world, particularly that of the Union of Socialist Soviet Republics, which I know will warm the cockles of the heart of the hon. Member for West Fife (Mr. Gallacher), But we should be failing in our duty if we were to allow ourselves to let matters rest where they are, without inquiring what are the causes of these discontents and disloyalties. It is one of the features of our Imperial administration on which we have a right to pride ourselves, that we benefit by our special practical capacity in material things such as engineering, sanitation and commerce, especially the poorer classes in the Colonies, but we seem to be very much less happy in dealing with the educated classes in the various portions of the Empire. We do not seem to provide them with those opportunities for intellectual development that are provided for them in other Empires.
It is common knowledge throughout the French Empire that the natives of the French Colonies, however dark their colour may be, when they are educated, look upon themselves as the spiritual descendants of Voltaire, Jean Jacques Rousseau, Victor Hugo and Fabre. The opposite is the case with us, yet all the time a war of cultural development or of intellectual opportunity is going on. New vehicles for the transmission of thought, such as the wireless and the cinema, have been perfected, and other nations and cultures are making vast use of those vehicles, while we hesitate and are slow to take advantage of them. If we have any faith at all in the ideas underlying our civilisation, we should be impelled to propagate them, and to use the most suitable of modern vehicles for the propagation of those ideas. Particularly is it necessary for us to utilise these


new methods to the maximum capacity in the Mediterranean, where we are face to face and in constant contact with two very powerful cultures, the Greek and the Latin cultures. In these days, when we have very much less material power than we had in 1914, we have all the greater need of these intellectual reinforcements. Such would be my first suggestion to remedy some of the discontents which have brought down responsible government in Malta.
My second suggestion is that our Colonial service should have a special Mediterranean section, especially trained for Malta and Cyprus, and not interchangeable with officials from East or West Africa. These two islands should be bastions of British culture in the Mediterranean, where they are faced with the rivalry of Greeks and Latins, and need, to my mind, quite other men and other methods from those which give such good service in Africa, where there are far less civilised and far less subtle populations. My third remedy flows naturally from the other two, and it is that by every means in our power we should show the Maltese intelligentsia that we do care for their welfare, and are ready to open every possible opportunity to them for identifying themselves with our Imperial institutions, whether in all three Defence Forces or in the civilian services also. Every opportunity should be taken to identify educated Maltese with British institutions throughout the Empire.
In this connection it is most earnestly to be hoped that suitable representatives of the Maltese nobility will be invited to His Majesty's Coronation next year, and that their courtesy-titles should be, as far as possible, harmonised with our own usage here. Small units lose their pettiness and parochialism only when they can feel that they are integral parts of a much greater whole, and that the greatness of the whole renders each fraction greater than when standing alone. When that attitude of mind is prevalent both here and in Malta, combined with the steady increase of progressive government, which, as the Secretary of State has indicated, is to be given to the Maltese, we have every ground for believing that then we shall have a happier Malta and a stronger and more contented Empire.

9.22 p.m.

Commander BOWER: I must confess to a certain sense of disappointment that, when we are discussing Clause 2 of the Bill, we have not one of the learned Law Officers present. The Clause appears to raise very important questions, and doubtless there are precedents for this kind of thing. I cannot see why, when there are obviously all sorts of cases where legislation, ordinances or enactments in various parts of the Colonial Empire are held to be ultra vires, in the special case of Malta, Parliament appears to be usurping the functions of the Privy Council. Parliament has, of course, a perfect right to do so, but we ought to have a little more elucidation on this important point. I hope that the right hon. Gentleman will tell us something about it when he replies. In regard to Clause I, the effect is to remove existing limitations to the power of His Majesty's Government
to revoke or amend by further Letters Patent all or any of the provisions of the Malta Constitution Letters Patent, 1921,
under which the Constitution of 1921 was granted. Under the original Letters Patent, His Majesty in Council surrendered the right to legislate by Letters Patent and reserved no power to revoke the 1921 Constitution. It is now obviously sought to revoke that Constitution, and this Bill is its death knell. I should not be at all surprised if it is the death knell of responsible government in Malta. Malta is a fortress, and certain interests have to be protected. Under the Constitution of 1921, defence, as well as everything connected with the armed forces, and such things as currency, the issue of passports, restriction of aliens, etc., were reserved. This Constitution, which was devised during that orgy of so-called self-determination which followed the War, was a cumbrous and top-heavy instrument, not at all suited to the conditions of the Islands. While I do not regret the passing of that 1921 Constitution, I am not at all satisfied with the statement of the right hon. Gentleman as to the future. It seems to me that the Government have no moral right whatever to deny representative government for one moment longer than is necessitated by a grave emergency. The whole history of the Maltese people shows that. I propose briefly to delve


into the history of Malta, and I hope I may be able to show that that is so.
The Islands have had a very chequered history. They were originally colonised by the Phoenicians. The Greeks followed, and they were replaced by the Carthagenians, who were Phoenician in origin. Under Rome, the Islands were raised to a great height of culture and prosperity. During the decay of the Roman Empire, they were occupied by the Vandals and the Goths, and finally by the Arabs, who apparently killed off all that survived of the Greek population. In the eleventh century Roger the Norman expelled the Saracens, and Malta became part of the Kingdom of Sicily until, after the Sicilian Vespers, it became the property of Spain and was granted to the Knights of St. John by Charles V in 1530. When the Knights of St. John went to Malta the Grand Master was met by the Popular Council, who, before opening the gates of the capital, insisted that he should guarantee their ancient rights and privileges. There is no doubt that the Popular Council which included elected representatives existed from the time of Roger the Norman, or even earlier, and continued to function in some respects under the Knights of St. John. Then Napoleon captured Malta, but after his defeat at the Battle of the Nile the Maltese population under a reconstituted Popular Council rose against the French, and the armed forces of Portugal and Britain helped the Maltese. Finally, confirmed by the Treaty of Amiens, and the Peace of Paris, the Maltese voluntarily elected to join our Empire.
Malta has always belonged, roughly speaking, to the nation which held command of the Mediterranean. The British government started various forms of regime from the autocratic government of Sir T. Maitland, who was known as "King Tom," to full blown responsible government. The Royal Commission of 1931 has some remarks to make on this subject. It says:
It would be almost possible to plot a graph of the constitutional history of Malta during the last 100 years showing the rise and fall of Constitutions modelled alternately on the principle of benevolent autocracy and that of representative government. From time to time some measure of self-government was granted and then, after a period, superseded by a strict Crown Colony system.

That went on until 1887, when the Strickland-Mizzi Constitution was brought into force. If that is considered by the right hon. Gentleman to be an unfortunate name for the Constitution, it perhaps might be called the Delaware Constitution, after the Colonial Secretary of that time. Under that Constitution on the representative model a Council of Government was set up, composed of six officials and 14 elected members. Money votes were to be decided by the elected members only, but could only be introuced by the Governor, or on his express sanction. The disadvantage of that was that the elected members were given power without responsibility. They could dislocate the machinery of government by cutting off supplies without being called on to form an alternative government. That was possibly the most successfunl form of Constitution that Malta has had. This Constitution worked fairly well for some years, but eventually, owing to differences of opinion over the language question, the elected members became very tiresome and forced His Majesty's Government to legislate by Order in Council. Mr. Joseph Chamberlain in 1901 said:
It is not to be contemplated that the state of things which we all regret and which exists at the present time should continue. The elected members themselves will be ready to admit that. They cannot expect the Government responsible for this great Imperial fortress to allow this childish game to proceed, and it would be clearly the duty of any Government under these circumstances to preserve the great Imperial interests in their keeping either by going back to the Constitution before 1887 or by such a modification of that Constitution as may he necessary to give the Government a controlling voice in the administration. I make no threat—I have endeavoured to treat the question in a conciliatory way. I hope that no drastic measures may be necessary, and that the elected members and all concerned will meet mme in the same spirit in which I have endeavoured to meet them.
Unfortunately, the elected members did not see eye to eye with Mr. Chamberlain, and the Constitution had to be suspended, and from 1903 until 1921 there was pure Crown Colony Government. The language question ever since has been the one burning question in Malta. The Royal Commission went into the matter thoroughly, and made some illuminating remarks in their report. Speaking of the Maltese language they said:


While numerous peoples have occupied the Islands for varying periods, by virtue of the sea power which they possessed in the Mediterranean, the Maltese have always maintained a tenacious hold over their own language. Necessarily with the advance of different types of civilisation and of science it has largely borrowed, like every other language, from different nations and particularly from Italian and in recent times from English sources, but its main basis has remained.
Professor Sir Themistocles Zammit, in his evidence before the commission, said:
Every child from the lowest to the highest talks nothing but Maltese. In intercourse with everybody in the Island, Maltese alone is used. I have never heard anybody talking Italian or English in a private house except those who are indirectly connected with the Italians or with the English people. So you cannot ignore Maltese, especially as a language for a child to graft upon it another language.
The Royal Commission also say:
Italian was used for all notarial documents, having gradually superseded Latin. The Grand Master of the Knights, Emmanuel de Rohan, in 1784, incorporated the Code of Grand Master Antonio Manoel de Vilhena, dated 15th November, 1723, and added much of his own, including various legal customs. His Code is still treated with great respect in the Maltese Courts. In 1826, Sir George Cornewall Lewis and Mr. Austin, Royal Commissioners, suggested that Italian should remain the official language, on the ground that Italian was of chief service to trade in the Mediterranean. At that time there was no emigration to English-speaking countries and no world-wide trade to the Mediterranean Sea.
The small educated class of the Maltese speak English and Italian, nearly all of them both languages, in addition to their native Maltese. Maltese is the language of most of the sermons, in the shops, markets, streets, and public meetings, on election platforms, and in a growing vernacular Press. Italian has its chief footing in the University, law, medicine, and the Church, but it is not known by the majority of the people.
The whole trouble in Malta has been the attempt of a small but influential clique of Maltese to force Latinity on the Maltese people. Not more than 15 per cent. of the Maltese speak Italian. A great many more speak English, and, as I have said, they all speak Maltese without exception. The enormous influence of the Church has of course, rather naturally, but none the less regrettably, been entirely on the side of Italian. Then, again, there are complications due to inter-marriage; Italian-speaking Maltese in many cases marry Italians, and so on.

I am sorry to say it has been the fashion of the Colonial Office to deny that there is any real, substantial anti-British feeling in Malta, but I submit to the House that recent events have rather shown that idea to be false. The Royal Commission, referring to Mr. made some remarks with which I am bound to say I disagree. They said:
It does not appear that Dr. Enrico Mizzi has ever made any secret of the fact that under certain circumstances he would favour stronger connection with Italy, but he has been and may again serve as a Minister in Malta.… We mention this subject because so much has been made of it, and we consider that the accusation of disloyalty against the Nationalist Party is incorrect and largely founded on rumour and surmise. We are not aware how far the Government of Italy, a great and friendly country closely allied to Great Britain in so many ways, may be cognisant of any activities in Malta, but, if any activities are undesirable, your Majesty's Government would doubtless take any necessary steps in the matter.
I would point out that His Majesty's Government have done nothing else for the last three or four months but deport Italians almost daily. Mr. Delia, an ex-member of the Legislative Assembly, and the Secretary of the Nationalist Party, who acted for some time as the Maltese equivalent of Parliamentary Private Secretary to Sir Ugo Mifsud, was sentenced only the other day to three years' hard labour for espionage in the interests of Italy. I feel that, although Lord Strickland and his party have been accused very often of unduly playing the harp on their loyalty, and on the disloyalty of the other side, there is a great deal more in it than has hitherto been suspected.
The 1921 Constitution broke down twice, first under Lord Strickland's administration, when he became involved in a dispute with the Church. I have no desire to rake up the ashes of a fortunately dead, or at least dying, controversy. As the House knows, the Royal Commission was appointed, and reported in favour of immediate elections being held, with the
result that in 1932 the opposition party to Lord Strickland were elected. There is no doubt whatever in my mind that the Church again exercised a lot of very undue influence. In my maiden speech in this House in 1932 I quoted the case of a parish priest who went round from door to door telling illiterate Maltese that, if they voted for Lord Strickland, an angry god would send worms and


insects to devour their crops. Any number of instances of that sort, perfectly well authenticated, could be given.

Mr. LOGAN: There were one or two people who took the same attitude in regard to the Tories not getting in in the City of Liverpool.

Commander BOWER: In 1932 the question of language was reserved, and the Government decided to put into force the recommendation of the Royal Commission that Italian should cease to be the language of the elementary schools, but that Maltese and English should be taught in the elementary schools and that English should be the qualifying language for admission to the secondary schools. This was done. It was accepted with a very ill grace by the Maltese Ministry, and the moment I saw that Mr. Mizzi had been appointed Minister of Education I knew there would be trouble. The Maltese Nationalist Government set themselves out to nullify the language regulations in every possible way. They were warned time and again. I know many of them very well. Some of them came over here, and I told them that it could only result in the suspension of the Constitution; but they all said, "No; look what happened in Ireland. We have only to dig our heels in, and we shall be all right." They would not take any advice, and the result was that the Constitution was suspended again.
Crown Colony Government has certainly done much, and, with Maltese now in use as the language of the law and Italian eliminated from the elementary schools, I think the irritating language question is now almost settled. It may be said that responsible or representative Government cannot be restored in Malta while existing personalities are still living in politics in Malta, but I do not agree with that. I think that any kind of constitution must be personality-proof. I think that, if in the due course of nature Lord Strickland and Mr. Mizzi are both removed to what we may hope will be a higher sphere, there is no guarantee that other people will not arise who will be just as arduous political opponents as they have been in the past. I have heard it suggested in this House that Lord Strickland, for instance, would have been better employed had he, on retiring from a very distinguished Colonial career, be-

come an Elder Statesman in Malta, but there again I do not agree; I do not see why he should. The experience of the last few days in this House has shown us how difficult it is to persuade our Elder Statesmen to forsake the cut and thrust, the rough and tumble of politics for a duller and calmer Nestorian role. I fully recognise the difficulties, but during the whole of last century Malta has alternated between representative Government, Crown Colony Government, back to representative Government, back to Crown Colony Government again, and so on, and I cannot agree that because, so far, a satisfactory form of Government has not been found, we should stop trying; nor can I agree with the expression of the Government's policy which gives no guarantee that there is going to be representative or responsible Government within a decent lapse of time. I think that it ought to be given at once. After all, the Constitution has now been suspended for over two years, and there is no doubt whatever that the Maltese people, and particularly the educated classes, are gravely concerned about this. I have spoken to many of them quite recently, and they feel a sense of injury. They realise, as we do, the difficulties and the troubles, but they think they ought to be given another chance, and I must say I agree.
In conclusion, I would like to say just two words which I hope may perhaps meet the eyes of some of my friends in Malta. To the Church I would say that the Church in Malta wields an influence far in excess of that granted to it by Canon Law, and I think it should beware of the fate of the Church in other lands where such influence has not always been wisely used. To the Nationalist party, many of whom are personal friends of mine and for whom I have a great regard, I would say, "You loudly assert your loyalty. Very well; prove it by turning out the disloyal element, and have nothing to do with them." To the Maltese as a whole I would say, "Remember that, although you are a little nation, you are yet a great nation with a very proud history. You entered voluntarily into our great Commonwealth. Try to develop yourselves politically, so that you may play a great part in a great future."

9.45 p.m.

Mr. MARKHAM: We have just listened to a speech so packed with learning and local knowledge that one can almost congratulate the speaker on being a Royal Commission in himself. My hon. and gallant Friend has given a most excellent answer to the arguments put forward by the hon. Member for Caerphilly (Mr. Morgan Jones). I listened to that speech very carefully indeed, and my impression of it was that hon. Members opposite were being urged to oppose the Bill not upon its merits but simply as a party action. The speech that we have just heard has pointed out conclusively that, if we adopt that policy with regard to the treatment of our Colonies, we are going to have a series of muddles such as we have experienced in Ireland, and probably only just avoided in India, and I would appeal to hon. Members opposite not to treat this from a party standpoint at all. The hon. Member for Caerphilly asked what were the reasons for revoking or amending the Constitution, and professed his entire inability to find them. He has heard them since. He has heard of this deliberate subsidisation, by a professedly friendly Power working against the British Government by every corrupt means, of the so-called loyal members of the Maltese governing party. [An Hon. MEMBER: "Why did not the Minister mention it?"] It is the duty of a Minister of the Crown to be on as good terms as possible with every shade of opinion in the Crown Colonies. On the other hand, it is the duty of every Member of the House, and of the Government as a whole, to resent attempts by foreign Powers to undermine British strength, especially in our islands such as Malta.
We have heard the evidence of my hon. and gallant Friend who has just spoken. May I add a little to it? Early this year I was travelling through Italy, and on the bookstalls you could see literature of the kind that was seen in Germany just before the War, when you had maps showing Mittel Europa, with Germany ever extending itself. On the Italian bookstalls you see maps showing an Italy which includes territory at the moment under the control of friendly Powers, and my hon. Friend the Member for Lichfield (Mr. Lovat-Fraser) made a distinct point of the Italian boast that in the near future Malta would once again be Italian. There has been a

deliberate underground campaign on the part of Italy to subsidise and pervert this 15 per cent. of the population of Malta with the ultimate idea of securing Italian control. It has been going on for some years and I regret exceedingly that neither the Government of Malta nor the Government of this country has found a means of legitimately combating the corruption that has been going on. The hon. Member for Kingswinford (Mr. A. Henderson) made a remark about the Maltese nation. There never has been a Maltese nation. It has always been a subject Power, always cringing to some other Power than the one it happend to be under at the moment, in the hope of personal gain. That is the whole history of Malta.
I cannot too strongly support the remarks that have been made of the strength, especially the financial strength, of Italian propaganda for the so-called loyal Maltese which has been going on for many years. If there were no other reason than that for supporting the amendment, or even the revocation, of the Constitution of 1921, I fancy that that reason alone would carry some conviction to Members of the House. But there is another reason. The hon. Member for Caerphilly made the point that the attitude of this Government and, perhaps, preceding Governments in dealing with Crown Colonies was one of going back to ever greater autocracy and reversing democratic tendencies. That is absolutely false. He must know as well as anyone else that, in the case of Newfoundland, the Constitution was suspended at the request of the Prime Minister and of the people themselves, and it was at that democratic request that we sent out a Commission and made the required amendments. He also mentioned Suva, in Fiji. At whose request were those alterations made? They were made not at the request of Whitehall, but of Fiji. As against those two cases you have the cases of Egypt, Iraq, and recently India. where we have been extending the responsible power to people formerly under our more autocratic control. That is the tendency.
But the main reason that I would urge for supporting this is that there has been great harm done in the past through this see-saw policy from Whitehall with regard to the control of our Colonies,


and even of the Dominions. There has been a, switchback over a century between benevolent autocracy and radical democracy. In this case the engine seems to have been reversed, but it was not a National or Conservative Government that did the reversing from democracy to autocracy. It was the Labour Government, and it is because they had the courage to take the first step to put an end to a noxious evil that I ask them to support this Bill. Not a single speaker on that side has said he wants to go back to the Constitution of 1921 without change. Not a single speaker on that side has said he wants the continuance of the present autocratic governorship. They agree that a change is needed. This Bill gives you every opportunity of change that you want. You can amend or revoke, and if that party gets into power in the next five years, it can make any change it wishes.

9.55 p.m.

Mr. KELLY: Judging by the speeches to which we have listened, one would imagine that there are very few people in Malta who are not prepared to sell this country. The last speech will do a great deal of harm there and I wish it had never been delivered. I can hardly recognise the people whom I represented for a number of years, from the hon. Member's description. You will find in Malta many men employed in the dockyards, employed on the civilian side of the military establishment and employed by the Air Ministry, who are equal to the best that is to be found in this or any other country. Judging by the statements that we have heard to-night, you would imagine that every one was disloyal and that there were few who could be depended upon. [Tim MEMBERS: "No!"] We have heard very little else.

Mr. MARKHAM: That is a gross travesty. I said it was only 15 per cent. of the population, and that 15 per cent. consisted to a great extent of the intelligentsia. I wish no aspersion to be cast on those who are working in the dockyards or in the Government Departments.

Mr. KELLY: I accept that statement, but it is vastly different from the one to which I listened, when I heard the Maltese described as people who were always cringing and subject to others.

That was a statement contrary to everything which I know of those people, with whom I have been associated for years in their efforts to improve their position and standard of living and to raise the general condition of the working people in that part of the world. Tonight we are asked to agree to this Measure, which deals, among other things, with the appointment of judges and with the fact that the trade unions of Malta have representation in the Council. Not a word of explanation of these matters was given by the Minister. He kept very closely to a draft which appeared to have been handed out to him, but there was not a word with regard to the Sections which we are asked to-night to agree to repeal. One Section deals with reserve matters, another with the judges, and a third with the Trades Union Council. I have known that ever since the Trades Union Council was given representation the idea has never been liked by His Majesty's Government. There have been great difficulties in the past with regard to the choice of persons from the trade unions in the island to represent the people with whom they work.
I would ask the Minister to explain why we are being asked to-night to agree to the repeal of those particular Sections, 1 to 4. Why are we being asked to agree to legalise ordinances without being told what they are? Are hon. Members to go into the Lobby in response to the appeal to vote for the Bill without knowing what the Bill lays down? There has been no explanation by the Minister as to the ordinances about which very grave doubt is felt at the present time. I listened with interest to the speech of the hon. Member for the Isle of Ely (Mr. de Rothschild). There was a time when the party of which he is a Member were believers in freedom, but to-night we have had a statement made in the nature of an appeal to the Government to set up some form of benevolent despotism that may take the people of Malta along the road to somewhere.

Mr. de ROTHSCHILD: That is an entire travesty of the statement that I made to the House. I wish to contradict the statement of the hon. Member for Rochdale (Mr. Kelly) here and now. I did not say that I was in favour of any kind of despotism, but I pointed out to the right hon. Gentleman, that if there was


any despotism at all, I hoped that it would be benevolent. I hope that before you put the question, Mr. Speaker, the right hon. Gentleman will answer several questions which I have put to him to-night.

Mr. KELLY: I accept the statement of the hon. Member, but I took down the words, and he made use of the term "benevolent despotism." The muzzling of the Press and the suppression of the people in Malta make it impossible to secure an expression of opinion with regard to the action which is now being taken by His Majesty's Government in this Bill. It is serious indeed that people who have acted so well towards this country and done so well in its service should not have an opportunity of expressing themselves as to the form of government and the method of administration to be operated over their lives. I trust that hon. Members on this side of the House and hon. Members on the opposite side will have regard for the good government and name of this country and go into the Lobby against this Bill.

10.2 p.m.

Mr. T. WILLIAMS: I want to supplement the statement made by my hon. Friend the Member for Caerphilly (Mr. Morgan Jones) earlier in the Debate. He submitted to the House that no justifiable reasons have been given for the complete revocation of the Constitution of 1921. He tried to imagine four or five reasons or excuses that might have been applied, but none of these applies to the position at the moment. Notwithstanding the statements made by certain hon. Members opposite and the fervent appeal of the hon. Member for South Nottingham (Mr. Markham), we are still wanting a true explanation of the introduction of this Measure. This country was more or less in charge of Malta for about 100 years, and it was only in 1921 that it conceded a Constitution in which self-government in regard to local affairs was made permissible.
I would ask not only the Minister but the hon. Gentleman the Member for South Nottingham and other hon. Members sitting opposite whether they can justify the statement that the Maltese, in the Legislative Assembly between 1921 and 1930, failed in any particular. If the hon. Gentleman the Member for South Nottingham, who appears to be so

interested in this problem, could point to any particular incident between 1921 and 1930, until religion intervened, where the then Legislative Assembly failed, there would be some justification for the belief that he advanced this evening. I do not think that the Minister, the hon. Gentleman, or any other hon. Member in this House can advance one instance where the popularly elected Legislative Assembly failed to fulfil its function during those nine years.
It was in 1930 that the first serious trouble began, when the Labour Government were obliged temporarily to suspend the Constitution, not because the Nationalist party or the Constitutional party or the Labour party had exceeded their powers, or because the Assembly failed in any way to fulfil the functions for which it had been elected, but because of outside influences which had intervened to serve the Maltese. It was not because of Italian propaganda or any other external influence, apart from that of the Church.

Mr. MARKHAM: The hon. Member has given his whole case away by admitting that it was outside influence that dominated Maltese politics during the period in question. If he will refresh his memory by reading the Debates in this House in 1930 he will find my point very fully borne out.

Mr. WILLIAMS: The hon. Member must give us credit not only for having read the Debates, but for having paid attention to the question before 1930 and subsequently. I said that the Legislative Assembly of Malta, a popularly elected body, as such failed in no material particular to fulfil the functions for which it was elected, but that an outside body, namely, the Church, intervened and disturbed the peaceful political situation. Following the suspension of the Constitution in 1930 the Royal Commission was set up and the Constitution was restored in 1932. Then the language question brought about a second suspension of the Constitution in 1933. That really is no justification for the revocation of the Constitution. In the nine years during which the Legislative Assembly was in operation I witnessed with my own eyes the good work that it was doing. I have had the good fortune to be in Malta three times during the past seven or eight years. I saw the Maltese Legisla-


tive Assembly building working-class houses out of revenue. No interest mongers were making money out of the Maltese people. That is a thing perhaps never hitherto done by any British Government or any official or unofficial council representing that country. I saw schools in the course of erection, and children being educated, between 1921 and 1930. For about 100 years children had had no educational facilities afforded. I saw social institutions developing. I saw that small island beginning to live in reality. When hon. Members tell me that the Maltese Parliament has been a hopeless and lamentable failure, I say that that statement is inconsistent with the whole of the facts.
I agree with the right hon. Gentleman opposite that the strategic influence of Malta is something that this House cannot ignore, but I am not sure that it is full justification for the complete revocation of representative government, or that it is a justification for returning to Crown Colony government. There has been no promise from the Under-Secretary of State for the Colonies in another place, or from the Secretary of State for the Colonies, that in any reasonable time the hope even of unofficial members of the Council being popularly elected will be realised. What does that imply? It means that the Governor will have full power to appoint his officials. I gather that there are lots of people in Malta, where professional jobs are not too numerous, who are anxious to obtain situations under the new regime, and at the moment they are perfectly quiet.
The Governor always in the case of Malta is an ex-General of the Army, virtually appointed by the Army Council. He will have full power to appoint the unofficial members of the Executive Council. I would ask the Minister and members of the House generally what is likely to be the type of person that a General will appoint as an unofficial member of the Executive Council. Is it likely that the General Governor or the Governor-General, whatever he may be called, will think in terms of a Labour member? The very life that he lives will compel him almost inevitably to look upon the average trade unionist or member of the Labour party as he looks upon a private in the Army. It is fair to assume that once this Measure has been passed Labour or trade union representation in the Island of

Malta will have gone almost for all time. Therefore, in view of our experience in the past, which is a fairly good guide for the future, we can have little or no confidence in the situation that this Bill will create.
A member of the Legislative Assembly, who had represented his country and was a loyal member of the British Commonwealth, was convicted because he had books in his possession written by George Bernard Shaw and H. G. Wells. That conviction still remains. No Colonial Secretary out of the last three or four has attempted to remove that conviction, a conviction merely because a respected. member of the Legislative Assembly, elected by the people through the ordinary agency of the popular vote, had books of that description on his bookshelf. I would ask the hon. Member for Nottingham, South (Mr. Markham) whether that is the sort of government that he thinks ought to exist in Malta? Is that the form of government that he regards as democratic and suitable for 1936 7 During the nine years that the Maltese people were able to elect their own representatives, not to deal with strategic points or questions of the Army or Navy but to deal with social questions which touched the daily needs of their own people, it cannot be denied that they made real progress in regard to housing, and that they developed their educational system.
I do not know whether I am wrong.—the right hon. Gentleman will correct me if I am—but I think that when the Maltese were given self-government in 1921, after 100 years of British government, they had 80 per cent, of illiteracy, but by 1930, after only nine years of self-government, they had a system of compulsory education. If it was not absolute and covering the whole of the children between five and 14, at all events the system was well on its way. To the extent that they had attempted to do something to educate their people they had justified a better fate for themselves than, this Bill will provide. Social insurance, compensation, and things that matter so much for the worker will be left to be dealt with, not by the individuals who have secured the franchise of the people and to represent their desires and aspirations, but to the executive council appointed by the Governor.


If the right hon. Gentleman had satisfied the House that the 1921 Constitution -was so intricate and difficult, that the Governor could not attend five different bodies where the Maltese language was, spoken, that other difficulties existed and that the Constitution no longer met the situation, and that he was willing fairly quickly to revise or amend the Constitution and make it more consistent with modern needs, perhaps there would have been no disagreement with his proposals, and we could turn ourselves into a Council of State so far as Malta is concerned, but if the mere revocation of the 1921 Constitution means a return to the pre-1921 position, when the workers were suppressed, held down, left uneducated, without decent houses and without opportunities for organisation, without any of those things which enable them to express themselves freely, we must oppose the Government on this Bill.
I hope the right hon. Gentleman is going to tell us what are the real reasons for the revocation of the Constitution apart from the fears of 15 per cent, of the residents in Malta; to what extent Italian influence and propaganda is responsible for this step, and what steps the Foreign Office have taken to invite the Italians to cease their propaganda. Also, will the right hon. Gentleman tell us what date he has in mind at which to allow the unofficial members of the Executive Council to be elected by the people and not appointed by the Governor? That is fundamental. I have a letter here from the Labour party in Malta, not an irresponsible party, but a party which secured the election of five members to the Legislative Assembly out of a total membership of 32. They have helped to govern the country in two periods during nine years, and have rendered good service. They ask us quite justifiably to see that they are not for all time deprived of the right to vote and elect their own representatives to look after their own interests, and to level legitimate criticism against the administration when it is failing in its duty to the people of this small island. I hope the right hon. Gentleman will give us the date he has in mind when the unofficial members will be popularly elected. In the absence of any reply we shall be obliged to vote against the Second Reading.

10.18 p.m.

Mr. ORMSBY-GORE: Let me say at the outset that I entirely agree with the hon. Member for Don Valley (Mr. T. Williams) that the Labour representatives in the Maltese Parliament were among the best and most useful members of the Assembly. While on this point let me deal with the question which has exercised the hon. Member for Caerphilly (Mr. Morgan Jones) and the hon. Member for Rochdale (Mr. Kelly), in regard to Sub-section (2) of Clause 3, with reference to trade union representation. It is rather a complicated point. When the new Constitution of 1921 was formed it was decided, quite apart from any representation which Labour might get from the electorate in the Legislative Assembly, to give them two reserved seats in the Senate. Accordingly, two seats were specially reserved for a trade union council, This was done with a certain gift of prophecy or hope, because at that time there was no trade union council in Malta. Consequently one had to be brought into existence for the purpose of electing these two representatives to the Senate of Malta. The object of this is to prepare the way and enable the Government freely to alter the Constitution of Malta. If the Senate is to be abolished—and I say frankly it is the intention to abolish the Senate—then the specific provisions in the original Letters Patent, amended in the Act of 1932, must be got out of the way by this Bill, otherwise we shall be in the position that there will be on the Statute Book a provision for a Trade Union Council created ad hoc solely for the purpose of choosing two members in a Senate which no longer exists. What I want to make clear to the hon. Member is that that does not mean that the Trade Union Council in Malta ceases to exist or ceases to be effective for ordinary trade union purposes. May I make that clear to the House and to everybody in Malta? There is no intention to do that, and I certainly hope that body will continue to do its appropriate trade union work and support the interests of its members.
The hon. Member for the Isle of Ely (Mr. de Rothschild) was anxious that I
should reply to one or two specific points. I think he was the first in this Debate to do what I did not do at the beginning—for reasons to which, I think, one of the


hon. Members on this side referred—that is, allude specifically to Italian propaganda. Nobody can deny that, particularly during the last years, one of the causes of difficulty, one of the problems that faces the Governor of Malta has been the intensification of Italian propaganda. One can never get away from that fact in considering this Bill to-night. I do not say it is the only reason, but it is one of the factors of the situation, in view of the general position in the Mediterranean and Malta. The case has been alluded to to-night of a prominent Maltese politician, taking an active part in the political life of Malta, having just been sentenced for espionage. If there were an election to-morrow in Malta all these questions would inevitably be raised, and yet at the same time, under the Constitution of 1921, all questions affecting the defence and external affairs of Malta are reserved matters and have nothing to do with the electorate of Malta. That is the absurdity of the dyarchic position.
The absurdity of the dyarchic Constitution of 1921 in Malta is the fact that it attempted to draw a line between matters of local concern—and I count as being purely local such things as social progress, the building of houses and so on—and other matters which could not in political practice be effectively drawn. I think the hon. Gentleman the Member for Don Valley used the very phrase which comes to one's mind in this matter. Frankly I would not have used that phrase in this particular connection. He said everything went well until there was the intervention of an outside body. Everything, he said, went well on the local government side until the intervention of an outside body, and when asked what was the outside body, he said it was the Roman Catholic Church. But the Roman Catholic Church is the established church of Malta. It is the church of the overwhelming mass of the people of the island. He described that as an outside body. It is both an inside and an outside body, but that is where a dyarchy is so limited.
There is the question of education. Obviously, the erection of schools is a purely local concern, raising no external question or no question of defence. But the question of whether Italian, English or Maltese is to be taught in schools is

not a purely local question; it is an Imperial question. That is why I say that, whatever constitution may be developed in Malta in the future, I hope profoundly it will not be a dyarchic constitution. And when the hon. Member for Kingswinford (Mr. A. Henderson) asks why it is desired to abolish the Constitution in Malta my reply is—because dyarchy is impracticable in Malta, having regard to the character of the island. It is the greatest mistake to imagine that you can have a single pattern constitution which is capable of being applied to every colony. I think there are about 50 colonial constitutions in the Empire and each varies from the others in some particular. Other Empires have sought to impose a stereotyped and uniform type of Constitution on all their colonies, but I do not think there is a single British colony, protectorate or mandated territory, the Constitution of which is identical with any of the others. They vary according to local conditions. None of them—apart from a few very old colonies such as the Bahamas, the Barbados, and the Bermudas which have remained practically unchanged for 300 years—retains exactly the same form of Constitution for great periods of time. They vary from time to time.
The hon. Gentleman opposite asks for an assurance that the present rigid form of Crown Colony Constitution in Malta, which obtains owing to the suspension of the former Constitution, will soon disappear. I cannot say, and nobody speaking from this Box could say, exactly when or attempt to give a date. I have already said that it is the intention of His Majesty's Government to begin once again on the recurring problem of Constitution making for Malta—to begin, admittedly, in the way in which the first restoration was begun by the association of electoral with nominated elements. But I must be the judge of the conditions in regard to the Mediterranean and in regard to the fortress, and of the political and other situations in Malta, in considering when it is desirable to reintroduce the system of election. As I said, I hope it may be possible to reintroduce a system of election for the unofficial side of the new Legislative Council. That is my intention, but I must reserve judgment as to when that is to be done, in the light of the conditions on the island.


The hon. Member for the Isle of Ely referred to wireless sets, but I think he misunderstood the position. He said that the introduction of the wireless in Malta had resulted in the constant reiteration of Italian propaganda from Italy into Malta. As a matter of fact, we have been making every effort to counteract that, and the introduction of the 1,000 wireless sets, to which I think the hon. Member referred, so far from having been an accident, was deliberately arranged by a company with which I think the hon. Member for Swindon (Mr. Wakefield) is associated in this country, namely, Wireless Relays, Limited, who have made great efforts to co-operate, not only with the Maltese Government but with leading Maltese citizens, to introduce the British Broadcasting Corporation's Empire programmes by means of relays for the people of Malta who desire to have it; and much has it been appreciated. It is quite unfair to draw an indictment against any politician in Malta, whether Lord Strickland, Dr. Mizzi, or anybody else. Malta has had a somewhat stormy political past. Do not let us imagine that everything was uniform and stable for centuries, or even for the century since the British connection with Malta before 1921, that nothing very much happened, that then everything went well for a bit, and that then there was trouble. The whole story of Malta is a stormy story.
I am confident that the association of Britain and Malta is still most emphatically desired by the overwhelming mass of the Maltese people. It is true that there is a minority of the intelligentsia who would prefer Fascist Italy, who are tremendously affected by Fascist propaganda, but I am quite convinced that the overwhelming mass of the people do desire to continue to be associated with us, and I do not believe that there is a deep-seated sense of grievance among them that the 1921 Constitution, which has twice been abandoned, is now going to be abolished. The hon. Member opposite asked me about the case of a man who, he said, had been sentenced in Malta, and tried, and kept in prison, for possessing the works of George Bernard Shaw.

Mr. T. WILLIAMS: I did not say he was sent to prison. I said he was con-

victed and taken to the prison gates, and that there the Governor discharged his prison liability, and he was allowed to return home, but the conviction remained, merely because he had those books in his possession.

Mr. ORMSBY-GORE: I do not think that is a very severe indictment. I understand he was not convicted because he possessed the works of Shaw, but because of quite other things in his possession, and that it was merely a sort of joking report that he also possessed the works of Bernard Shaw. But does it not suggest itself to the hon. Member that the fact that the Governor did not allow him even to serve a day's imprisonment, and that his sentence was wiped out immediately, shows that it is not a very good case to bring as an example of the brutality of British rule in Malta?

Mr. BRACKEN: Will my right hon. Friend tell us of any other instance where the final administration of justice is in the hands of the prison governor?

Mr. ORMSBY-GORE: It had nothing to do with the prison governor. It was the Governor of Malta, who alone exercises the prerogative of mercy. As a result of this Debate we have had from this side of the House two speeches to which I think I ought to pay a special tribute, namely those of my hon. and gallant Friend the Member for Cleveland (Commander Bower) who served many years in Malta and my hon. and gallant Friend the Member for Wirral (Captain Graham). I have some sympathy with the feelings of my hon. and gallant Friend the Member for Wirral on the question of the relation of administration and education. It is a matter that requires the most careful consideration of anyone in my position, and I feel that we must keep the closest eye on it, because not only there, but in every colony and protectorate, it is not mere administration of justice, it is not mere economic development, it is not mere improvement of the conditions of the working classes, it is not mere facilities for trade and commerce that count in colonial administration in the long run. It is the development of those things which are on the cultural and spiritual side which tie peoples not of our race to us throughout the Colonial Empire. It is on the cultural and the higher educational


side where, although we may fail, we ought to make a real effort, and I was delighted that my hon. and gallant Friend spoke on that matter. It is because of this Bill and what may follow it in a new Constitution, that I want to assure both this House and the Maltese people that on the cultural side we do want to understand them and to associate them with us and do all we can on that side. I know that many of them have been long associated with Italian culture. Many of them are attracted by the new phases of Italian culture that have developed in Italy in the last few years. [An HON. MEMBER: "Culture?"] That is how they regard it. We do want to give them the best of our culture and link it up with their great historical culture. I am sure that in that spirit we can go forward to a new Constitution of Malta, and by passing this Bill we shall have done a good day's work for the island.

Mr. de ROTHSCHILD: May I ask the right hon. Gentleman to answer the specific question which I put to him, namely, is it the policy of the Government to deny Malta for all time a responsible Government, as was said in another place'?

Mr. ORMSBY-GORE: I never said that. [HON. MEMBERS: "It was said in the other House."] "Deny for all time"—I do not quite know what those words mean, and I cannot on the spur of the moment answer vague, general phrases of that kind. I have defined my position to-night by an answer which, I thought, had made the position quite clear.
Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 176; Noes, 129.

Division No. 264.]
AYES.
[10.42 p.m.


Acland-Troyte, Lt.-Col. G. J.
Eckersley, P. T.
Levy, T.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Edmondson, Major Sir J.
Llewellin, Lieut.-Col. J. J.


Anderson, Sir A. Garrett (C. of Ldn.)
Elliot, Rt. Hon. W. E.
Lloyd, G. W.


Anstruther-Gray, W. J.
Ellis, Sir G.
Loftus, P. C.


Aske, Sir R. W.
Elliston, G. S.
Lyons, A. M.


Assheton, R.
Emery, J. F.
MacAndrew, Colonel Sir C. G.


Atholl, Duchess of
Emmott, C. E. G. C.
MacDonald Rt. Hn. J. R. (Scot. U.)


Baldwin-Webb, Col. j.
Emrys-Evans, P. V.
MacDonald, Sir Murdoch (Inverness)


Balfour, Capt. H. H. (Isle of Thanet)
Entwistle, C. F.
Macdonald, Capt. P. (Isle of Wight)


Barclay-Harvey, C. M.
Erskine Hill, A. G.
McEwen, Capt. J. H. F.


Beamish, Rear-Admiral T. P. H.
Everard, W. L.
McKie, J. H.


Beaumont, M. W. (Aylesbury)
Fleming, E. L.
Macnamara, Capt. J. R. J.


Birchall, Sir J. D.
Fremantle, Sir F. E.
Magnay, T.


Bird, Sir R. B.
Furness, S. N.
Maitland, A.


Blair, Sir R.
Ganzoni, Sir J.
Makins, Brig.-Gen. E.


Bossom, A. C.
Goodman, Col. A. W.
Margesson, Capt. Rt. Hon. H. D. R.


Boulton, W. W.
Gower, Sir R. V.
Markham, S. F.


Bower, Comdr. R. T.
Graham, Captain A. C. (Wirral)
Mayhew, Lt.-Col. J.


Bracken, B.
Greene, W. P. C. (Worcester)
Mellor, Sir R. J. (Mitcham)


Braithwaite, Major A. N.
Guest. Capt. Rt. Hon. F. E. (Drake)
Mellor, Sir J. S. P. (Tamworth)


Brocklebank, C. E. R.
Guinness, T. L. E. B.
Mills, Major J. D. (New Forest)


Brown, Col. D. C. (Hexham)
Guy, J. C. M.
Moore, Lieut.-Col. T. C. R.


Brown, Rt. Hon. E. (Leith)
Hannah, I. C.
Moore-Brabazon, Lt.-Col. J. T. C.


Browne, A. C. (Belfast, W.)
Hannon, Sir P. J. H.
Morrison, W. S. (Cirencester)


Bull, B. B.
Harbord, A.
Munro, P.


Campbell, Sir E. T.
Haslam, Sir J. (Bolton)
Neven-Spence, Maj. B. H. H.


Carver, Major W. H.
Heilgers, Captain F. F. A.
Nicolson, Hon. H. G.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Heneage, Lieut,-Colonel A. P.
O'Connor, Sir Terence J.


Channon, H.
Hills, Major Rt. Hon. J. W. (Ripon)
O'Neill, Major Rt. Hon. Sir Hugh


Chapman, A. (Rutherglen)
Hope, Captain Hon. A. O. J.
Ormsby-Gore, Rt. Hon. W. G.


Clarry, Sir Reginald
Hopkinson, A.
Orr-Ewing, I. L.


Colman, N. C. D.
Horsbrugh, Florence
Palmer, G. E. H.


Cook, T. R. A. M. (Norfolk, N.)
Hudson, Capt. A. U. M. (Hack., N.)
Penny, Sir G.


Cooper, Rt. Hn. A. Duff (W'st'rS.G'gs)
Hulbert, N. J.
Perkins, W. R. D.


Cooper, Rt. Hn. T. M. (E'nburgh,W.)
Hume, Sir G. H.
Petherick, M.


Craddock, Sir R. H.
Hunter, T.
Plugge, L. F.


Craven-Ellis, W.
Inskip, Rt. Hon. Sir T. W. H.
Porritt, R. W.


Crooke, J. S.
Jones, L. (Swansea, W.)
Radford, E. A.


Crookshank, Capt. H. F. [...].
Keeling, E. H.
Ramsden, Sir E.


Croom-Johnson, R. P.
Kerr, Colonel C. I. (Montrose)
Rankin, R.


Cross, R. H.
Kerr, J. Graham (Scottish Univs.)
Rathbone, J. R. (Bodmin)


Crowder, J. F. E.
Kimball, L.
Reed, A. C. (Exeter)


Cruddas, Col. B.
Kirkpatrick, W. M.
Rickards, G. W. (Skipton)


Davies, Major Sir G. F. (Yeovil)
Lamb, Sir J. Q.
Robinson, J. R. (Blackpool)


Dawson, Sir P.
Latham, Sir P.
Ropner, Colonel L.


Dower, Capt. A. V. G.
Leckie, J. A.
Ross Taylor, W. (Woodbridge)


Duckworth, G. A. V. (Salop)
Leech, Dr. J. W.
Ruggles-Brise, Colonel Sir E. A.


Duncan, J. A. L.
Lennox-Boyd, A. T. L.
Russell, S. H. M. (Darwen)




Salmon, Sir I.
Somerville, A. A. (Windsor)
Touche, G. C.


Samuel, M. R. A. (Putney)
Southby, Comdr. A. R. J.
Tufnell, Lieut.-Com. R. L.


Sanderson, Sir F. B.
Stanley, Rt. Hon. Oliver (W'm'I'd)
Wakefield, W. W.


Sassoon, Rt. Hon. Sir P.
Storey, S.
Waterhouse, Captain C.


Scott, Lord William
Strauss, E. A. (Southwark, N.)
Wickham, Lt.-Col. E. T. R.


Shakespeare, G. H.
Strauss, H. G. (Norwich)
Williams, H. G. (Croydon, S.)


Shaw, Major P. S. (Wavertree)
Stuart, Hon. J. (Moray and Nairn)
Windsor-Clive, Lieut.-Colonel G.


Simmonds, O. E.
Sueter, Rear-Admiral Sir M. F.
Womersley, Sir W. J.


Sinclair, Col. T. (Queen's U. B'[...]'st),
Tasker, Sir R. I.



Smiles, Lieut.-Colonel Sir W. D.
Tate, Mavis C.
TELLERS FOR THE AYES.—


Smith, L. W. (Hallam)
Taylor, C. S. (Eastbourne)
Lieut.-Colonel Sir A. Lambert


Smith, Sir R. W. (Aberdeen)
Thomson, Sir J. D. W.
Ward and Sir James Blindell.




NOES.


Acland, R. T. D. (Barnstaple)
Griffiths, G. A. (Hemsworth)
Oliver, G. H.


Adams, D. (Consett)
Griffiths, J. (Llanelly)
Paling, W.


Adams, D. M. (Poplar, S.)
Hall, G. H. (Aberdare)
Parker, J.


Adamson, W. M.
Hall, J. H. (Whitechapel)
Parkinson, J. A.


Alexander, Rt. Hon. A. V. (H'Isbr.)
Hardie, G. D.
Pethick-Lawrence, F. W.


Ammon, C. G.
Henderson, A. (Kingswinford)
Potts, J.


Anderson, F. (Whitehaven)
Henderson, J. (Ardwick)
Pritt, D. N.


Attlee, Rt. Hon. C. R.
Henderson, T. (Tradeston)
Quibell, D. J. K.


Banfield, J. W.
Hills, A. (Pontefract)
Richards, R. (Wrexham)


Barnes, A. J.
Holdsworth, H.
Riley, B.


Barr, J.
Holland, A.
Ritson, J.


Batey, J.
Hollins, A.
Roberts, W. (Cumberland, N.)


Bellenger, F.
Hopkin, D.
Rothschild, J. A. de


Broad, F. A.
Jagger, J.
Rawson, G.


Bromfield, W.
Jenkins, A. (Pontypool)
Salter, Dr. A.


Brooke, W.
John, W.
Seely, Sir H. M.


Brown, Rt. Hon. J. (S. Ayrshire)
Johnston, Rt. Hon. T.
Sexton, T. M.


Burke, W. A.
Jones, A. C. (Shipley)
Shinwell, E.


Chater, D.
Jones, H. Haydn (Merioneth)
Short. A.


Cluse, W. S.
Jones, Morgan (Caerphilly)
Silkin, L.


Cove, W. G.
Kelly, W. T.
Simpson, F. B.


Cripps, Hon. Sir Stafford
Kennedy, Rt. Hon. T.
Smith, Ben (Rotherhithe)


Dagger, G.
Kirby, B. V.
Smith, E. (Stoke)


Dalton, H.
Kirkwood, D.
Sorensen, R. W.


Davies, D. L. (Pontypridd)
Lathan, G.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Davies, R. J. (Westhoughton)
Lawson, J. J.
Strauss, G. R. (Lambeth, N.)


Day, H.
Leach, W.
Taylor, R. J. (Morpeth)


Dunn, E. (Rother Valley)
Lee, F.
Thurtle, E.


Ede, J. C.
Leonard, W.
Tinker, J. J.


Edwards, Sir C. (Bedwellty)
Leslie, J. R.
Viant, S. P.


Evans, D. O. (Cardigan)
Logan, D. G.
Watson, W, McL.


Evans, E. (Univ. of Wales)
Lunn, W.
Welsh, J. C.


Fletcher, Lt.-Comdr. R. T. H.
McEntee, V. La T.
Westwood, J.


Foot, D. M.
McGhee, H. G.
While, H. Graham


Frankel, D.
Maclean, N.
Wilkinson, Ellen


Gallacher, W.
Mainwaring, W. H.
Williams, D. (Swansea, E.)


Gardner, B. W.
Mander, G. le M.
Williams, E. J. (Ogmore)


Garro Jones, G. M.
Marklew, E.
Williams, T. (Don Valley)


George, Major G. Lloyd (Pembroke)
Messer, F.
Wilson, C. H. (Attercliffe)


Gibbins, J.
Milner, Major J.
Windsor, W. (Hull, C.)


Graham, D. M. (Hamllton)
Montague, F.
Woods, G. S, (Finsbury)


Green, W. H. (Deptford)
Morrison, Rt. Hon. H. (Ha'kn'y, S.)



Greenwood, Rt. Hon. A.
Morrison, R. C. (Tottenham, N.)
TELLERS FOR THE NOES.—


Grenfell, D. R.
Naylor, T. E.
Mr. Whiteley and Mr. Mothers.


Bill read a Second time.

Bill committed to a Committee of the Whole House, for To-morrow.—[Captain Margesson.]

Orders of the Day — AIR NAVIGATION BILL.

Order read for resuming Adjourned Debate on Question [25th June], "That the Bill be now read the Third time."

Question again proposed.

10.50 p.m.

Mr. MONTAGUE: May I ask the Patronage Secretary or the Chancellor of the Exchequer whether it is not possible to consider the

circumstances of this Debate this evening? It was understood earlier that the Air Navigation Bill would be taken after the Malta Bill on the assumption that the Malta Bill would be finished about nine or half-past nine o'clock. A large number of Members wished to speak on this Bill and it is now very late. The Bill, as amended, ought to be carefully considered, and we on this side think that another time should be given for the Third Reading. It really is too late to begin now.

10.51 p.m.

The PARLIAMENTARY SECRETARY to the TREASURY (Captain Margesson): At Question Time to-day the Deputy-


Leader of the House, in reply to the Leader of the Opposition, said that, of course, we should not start on the Malta Bill if we could not reach it by about nine o'clock, but he added a further sentence to the effect that in any case we must get the Report stage of the Finance Bill and the Third Reading of the Air Navigation Bill. That was made perfectly clear. When the Third Reading of this Bill was postponed last Thursday, in response to a Motion made by my right hon. and gallant Friend the Member for the Drake Division (Captain Guest), it was pointed out to the House that it would mean that the Bill would have to be taken on another occasion, which would mean an overloading of the programme. On that occasion he used these words:
May I thank the Government and the Patronage Secretary for having given way to the feeling of the House? It is not so much that one is disinclined to talk on the Third Reading late at night, but it is hard to do so after a prolonged Debate on the Report stage. I would like to register my thanks to the Leader of the House and the Patronage Secretary for the action they have taken."—[OFFICIAL REPORT, 25th June, 1936; col. 2114, Vol. 313.]
The feeling was that the House had been sitting all day on the Report stage of the Air Navigation Bill; a good many Amendments had been moved and carried, a number of alterations had been made to the Bill, and therefore the House considered it unfair to carry on with the Third Reading straight away, without seeing the Bill in its new form. In view of those arguments the Government were prepared to postpone the Third Reading, but, having met the House, and in view of the fact that it is not yet Eleven o'Clock, that there is still a good deal of business yet to be accomplished and that hon. Members have had an opportunity to consider the Bill in its amended form, I hope that they will agree to take the Third Reading now and dispose of this Measure, which has been in front of hon. Members for a good deal of time now—on Second Reading, Committee on the Floor of the House, Report stage, and now Third Reading.

10.54 p.m.

Captain F. E. GUEST: I think that the Patronage Secretary has stated his case very fairly, but on the other hand he has admitted that he had hoped the

Malta Bill would be disposed of earlier than now.

Captain MAR GESSON: I am afraid my' right hon. and gallant Friend misunderstood me. I did not say that. I said that unless the Report stage of the Finance Bill was disposed of by nine o'clock the Malta Bill would not have been taken. The Finance Bill might have gone on until eleven o'clock. Even so, in accordance with the statement made to-day by the Deputy-Leader of the House, we should still have been prepared to ask the House to take the Air. Navigation Bill.

Captain GUEST: I am myself bound to stand by the present decision, but I would like to register regret that the Bill is being taken at this late hour. I do not know how late the Debate may go on. There is great disinclination among those who are keen on the Bill to keep the House up for a long period. I do not know even now whether it is too late to ask the Patronage Secretary to consider it in that light. There has been no obstruction of the Bill in any part of the House from the start, and I should have thought that that would apply equally to the Third Reading. I myself cannot vote for postponing the Debate, as I am committed by what was said the other night, but I think it is a great pity.

10.56 p.m.

Mr. MONTAGUE: I beg to move, to leave out the word "now," and, at the end of the Question, to add the words, "upon this day three months."
It is perfectly correct that from no section of the House whatever has there been any attempt to hold up the progress of the Bill, and I think it can be reasonably said that the Debates throughout have expressed the desire on the part of every section and every party in the House that the Bill, when it finally came to be considered as a complete Measure, should be one of value to aviation. But I would like to say at the beginning that, although the hour is late, we are on the Third Reading, and, when the principles of the Bill are principles of magnitude, we cannot be expected extensively to cut short what we feel it necessary to say in regard to the Bill as it now stands.
The Measure is one which, in a very remarkable degree, has shown the expediency of having certain aspects of it


considered by those responsible for bringing it to the House in the light of criticism, that is to say, the Under-Secretary of State and those who have been responsible for piloting the Measure. In many respects they have very reasonably and generously given way to a certain amount of criticism, but nevertheless we consider that the Bill to-day is one of considerable inconsistency. It is a compromise, and it shows the disadavantages of a Measure embodying serious compromises. Let us consider what the purpose of the Bill is in the main. The most important consideration in the Bill is the increase of subsidies from £1,000,000 to £1,500,000 a year as a maximum, to be granted in subsidies to aviation transport companies. That amount of money is to be found by millions of direct and indirect taxpayers in this country who are not likely to get any direct advantage from the progress of aviation, and I think we ought to consider very seriously what advantage they may be able to get indirectly.
We have heard in the course of these Debates a great deal about the importance of aviation to this country. I am not concerned to deny the importance of aviation, as, indeed, of other industries, especially new and growing industries, to the economic development of the coup. try, but we ought to know why aviation is so important that millions of taxpayers in this country, who will never have any chance of direct advantage or gain from aviation, must be asked to continue to provide the money for these new and in creasing subsidies to private concerns. First of all, aviation itself—the idea that we live in a world of speed. That is all very well, but I remember the late G. K. Chesterton telling of a resident in the part of the country in which he lived who boasted about finding some transport connection that saved him a quarter of an hour a day, and he was very proud of having done it. Mr. Chesterton's com ment was to ask him what he did with the quarter of an hour, and there was no answer. When we get, as the basis of asking for huge sums of money from the House, the vague statement that aviation is something that has to be developed and fostered, we are entitled to inquire why, and what advantage there is for the great bulk of the people. I do not deny that there is advantage, but

I want to know what it is. Is it a question of air-mindedness? I suppose greater speed in commercial correspondence is of some importance, but I do not see why commercial people should not themselves foot the Bill if they want greater speed in their letters. I am inclined to consider that the real importance of aviation is the matter of training pilots and providing the basis of military development.

Captain GUEST: Hear, hear!

Mr. MONTAGUE: That is admitted by a right hon. and gallant Gentleman who, of all people in the House, ought to know what is behind the demand for vast public expenditure upon civil aviation. If that is the reason, these expenses ought to come in the Air Ministry Votes, and not in a Bill of this character purporting to subsidise civil aviation, because of its importance from a civil point of view.

Captain GUEST: I think they do come under the Air Estimates. There is an increase in Vote 8.

Mr. MONTAGUE: I am perfectly well aware that Vote 8 deals with civil aviation, because civil aviation comes under the Air Ministry, but we are not dealing with Vote 8 to-night and, when I said it should be a question of Air Ministry responsibility, I meant on the military and not on the civil side. It ought to take its proper place, and the House and the country ought to understand what this £1,500,000 to subsidise private air transport is being asked for. The point of view of the Labour party upon this Bill is that public money ought not to be granted to private monopolies without public responsibility and public representation upon the boards even of public utility companies. The idea of subsidising—I quote the phrase from an article in one of the flying papers:
in order to carry out the anxiety to see air transport take its place among ordinary capitalist commercial enterprises,
that is the meaning of the phrase that was used, that aviation some day may fly by itself. It is that the public shall find millions upon millions of money in order to foster the development of Air Ministry and then the State has to be kicked out and the industry has to be left to fly by itself and make its profits by itself and for itself. Viscount Elibank recently said:
In all the circumstances it would be an act of folly to split the available sub-


sidy funds among concerns operating either now or prospectively over the same route merely on the ground that it is a good thing to encourage competition. I agree that monopolies, as a general rule, are had, but in the development of our Imperial communications unity of control and administration is essential for efficiency.
I should like that phrase to be remembered for a moment:
for the planning of long-term policies, for the negotiation of concessions with overseas countries, and for the most economic employment of public funds in the form of subsidies.
He goes on to speak about Imperial Airways and British Airways. So that after that public enterprise has succeeded in building up a highly profitable air commerce, the public are to be politely told to get out. Let me put this point: If the Government have no other alternative than to entrust plans of air services in the North Atlantic—this is a very vital point in connection with the whole of the discussions—to Imperial Airways, why is that not the case with regard to the route in the South Atlantic? If the South Atlantic route is to be open to tender, why not the North Atlantic route? There are five companies according to the statement of the Under-Secretary of State, that have been ready to submit plans for the South Atlantic proposal. That of Imperial Airways is a huge monopolistic concern. I have personally no objection to that monopoly as such, but if there is to be a monopoly and it is to be fostered by subsidies, we want to know why there should not be a greater public control and representation than there is. I know that there is some public representation. The Government hold 25,000 shares, but there is to be a great increase of capital. The public do not come in there. There are indications that that capital will be gambled with upon the Stock Exchange, and those gambling profits will be made by people who are really using public money for the purpose, and yet no increase of representation upon the board is proposed. Why is there no grant of shares in return for the amount of money which the House of Commons is asked to grant? The Under-Secretary of State, in his speech on Second Reading, said:
The British air transport can best meet the very keen competition from abroad if it is handled by commercial companies in which the Government has a financial stake. T think that a State controlled organisation

might very easily find itself severely handicapped in such a sphere of operations. There is the further danger that such a change might result in too cumbrous a unit of management, with a consequent rigidity which might well prove a handicap to efficiency and progress.
If that is correct—and I would like the Under-Secretary to mark that point—it is just as much a case against giving a monopoly to Imperial Airways as it is against the State organisation of the air services. It is a privately-owned monopoly at the present time, and if that is the argument against a State (organisation, which is backed up by the right hon. Baronet the Member for Chelsea (Sir S. Hoare) in very similar terms, it is, of course, the old out-of-date argument against Socialism used by people who do not understand what Socialists desire in connection with public enterprise. It is only when the public have a finger in the pie that it is said that the management becomes cumbrous and rigid.
This company and its associated companies serve four continents, and every day the machines of these companies fly a distance which approximates three-quarters of the earth's circumference. It has dealings in 25 currencies, carried over 24 million letters last year, travelled three times as far as it did five years ago, and had almost four times as much transport. That being so, if it is dangerous from the point of view of efficiency to make the air service a public service, as we propose, then from the same point of view it is dangerous to vest these monopolistic powers in Imperial Airways. But I am not taking that line. I think that Imperial Airways does its work exceedingly efficiently although there are some in this House who disagree with me. It is a very fine organisation, a big organisation, and it would he just as possible for that organisation to become a public utility concern, more directly responsible to this House, with public money at least having something to do with public interests and ultimate public control. We do not desire that our idea of development in this direction should be misunderstood. Socialist Members, and the Labour party generally, do not propose that every type of industry should be directly State managed. There are some types of industry which can be
managed better that way. The Post


Office is, of course, an obvious illustration because of the nature of the business it conducts. We suggest that in the case of the air you have a medium which is world-wide, which has no frontiers, no barriers, and we say that it should belong to the whole community and that it should be developed for public purposes by the public. In this matter of air navigation we should avoid the muddle we have seen in the development of other forms of transport for the last 100 years. Professor Keynes put the matter thus:
In many cases the ideal size for the unit of control and organisation lies somewhere between the individual and the modern State. I suggest, therefore, that progress lies in the growth and the recognition of semi-autonomous bodies within the State—bodies whose criterion of action within their own field is solely the public good as they understand it, and from whose deliberations motives of private advantage are excluded, though some place it may be necessary to leave, until the ambit of men's altruism grows wider, to the separate advantage of particular groups, classes, or faculties—bodies in which the ordinary course of affairs are mainly autonomous within their prescribed limitations, but are subject in the last resort to the sovereignty of democracy expressed through Parliament.
If we take the history of transport—railways, road transport, or even public concerns like electricity and agriculture in their modern public developments—we find precisely the same thing that I have suggested we are in danger of finding in regard to air navigation, and that is that we begin by considering vested interests. As the industry develops, there is evident the impossibility of allowing complete private control, because the public must come in somewhere. All sorts of compromises come about, as happened in the case of railways and road transport. With regard to railway development, from 1834 the companies showed a tendency to combine, in 1839 a Select Committee of this House reported that railways should not be allowed to combine unchecked by competition and uncontrolled by authority. Mr. Gladstone's Committee in 1844 proposed price revision, provision for the State buying the railways in 10 years, and for Parliamentary trains. They supported the Parliamentary train and got it, evidently to provide Mr. W. S. Gilbert with one of the punishments which fit the crime. We went on until the War,

when it was found necessary to nationalise the railways. We went back from that after the War, and to-day a kind of compromise. It is the same in the case of electricity and road transport. You have the electricity undertaking in a state of perfect chaos and in the case of the London Passenger Transport Act you have to-day a compromise because it is impossible to carry on a competitive individualistic concern under modern transport conditions; you have a compromise which satisfies no one. One may instance other industries to show how disadvantageous it is not to take at the beginning of a new industry the opportunity to arrange and organise it for the public service when it is in the nature of a monopoly, as the air service must be. Where it is a, question of a monopoly, as air navigation must be, we should begin right and see that the community which will have to foot the bill rather extensively should have real effective control.
A word upon the question of insurance. There again we have an illustration of compromise. We welcome the little bit which has been given us by the Government on the question of insurance, but at the same time the whole thing is inconsistent and absurd. You still have left the absurd notion that you have to consider the question of insurance against accidents from the standpoint of the machine itself. Why? Because insurance companies will not give an unlimited insurance for property as for life. In that case, why not consider even now, because there is still time to do it, if insurance companies are willing to give anything approaching unlimited insurance for life, making it a question of unlimited insurance for life, leaving your restrictions upon property? That would be the sensible way of dealing with the question. Captain Lamplugh, of the British Aviation Insurance Company, a great authority on insurance, says:
Aviation has burst, or perhaps more literally has crashed, upon a world of transport which, generally speaking, was well appreciated by the whole community, and the insurance world in general is trying to assimilate or digest a form of hazard of which it has no previous experience.
There are only a few hundred aerodromes in the country and that is an argument for broadening the whole question of air insurance so that aircraft insurance can


be covered for a greater risk. He went on to say:
Aviation insurers will naturally be anxious to avoid increasing third-party premium rates. This is not a question of altruism but of sheer business common sense. The increase of aviation insurance business is bound up with the increase of civil aviation … It must be borne in mind that, at the moment, the cost of insurance is divided between a very small number of insured, as compared with motor car insurance, for example.
We are to look forward to a big increase in flying in this country, and that means that the insurance companies will then have experience and will be able to decide as to the terms they can give for aircraft insurance. I think I am entitled to ask what guarantee there is in this Bill that when risks are lowered, as it is hoped they will be, by the increased use of aircraft, the premiums will come down? Surely the question of compulsory insurance ought to have been considered from a very much broader point of view, and from the point of view expressed by Captain Lamplugh. Aircraft insurance is in a tentative stage at the present time. As it becomes a much more certain business actuarially the way ought to be left open to deal with the question as to how we are to insure against accidents both to life and to property. The absurdity still remains in the Bill that you depend for a great deal of the insurance on the weight of the aircraft, which has nothing to do with the case. It ought to be possible to find some way in which, with the development of aviation, the insurance companies will find their feet and be able to offer reasonable insurance premiums, so that unlimited insurance, at least for human life, can be embodied in an amending Measure in the future, and the matter be dealt with in some sensible way, instead of being left at this very unsatisfactory compromise.
That is all I wish to say to-night. We have dealt with the Bill in its various stages. We have put our point of view, and I think it will be agreed that we have done so with reason and without any desire to hold up the progress of the Bill, for we recognise that, in the main, it is a necessary Bill and that the new aspects of aviation have to be dealt with by legislation in this House.

11.23.p.m.

Captain GUEST: It is very difficult, unless one is moving the rejection of the Bill, to take the time of the House at this hour without being sorry for the Members one keeps here, but the Bill is of such importance to many of us that I ask the indulgence of the House for a few minutes. A phrase fell from my hon. Friend who moved the rejection of the Bill which I would like to take up with a view to straightening out a thought which he was expressing, and in which I think he rather drew a wrong impression from a remark I had made previously. He conveyed to the House that I favoured this Bill and the development of civil aviation purely for the purpose of getting more military pilots. That is not so. I favour this Bill on its own merits, but I am glad to think that a large number of recruits who may come at some time or other to the defence of the nation in the air will be assisted by the operation of the Bill. I think that is a fairer way of putting the matter, because from the point of view of National Defence the more aviation there is of a civil and commercial nature the better. It is only by a volume of activity of this nature that we shall get a large number of men, both for flying and for working in the shops, who will come to the national aid in times of emergency. Therefore, I feel that the Bill is a good one. Our excuse for asking the House to consider certain details at this hour is the importance of the Bill. Aviation is a new science which is just being put on its legs and the Bill deals with it legislatively for the first time in an intelligible fashion. In other words, the Bill is the Magna Charta of civil aviation and as such it is worthy of special consideration, because on it will be founded the activities of civil aviation for the next 10 or 20 years.
To-night, I do not propose to go into the details of the Bill. I propose to ask the Under-Secretary to give attention to what may be described as a side-issue, but is a matter very closely linked with the Bill, although it has not played a large part so far in these discussions. The sum which the Bill proposes to hand over to civil aviation in excess of what has gone before is about £900,000 a year. A sum of £600,000 goes to one company in respect of services for Imperial


purposes which have been efficient and admirable; but there is a further £900,000 to go to other companies for what may be called aeroplane or seaplane Empire routes, and we know that a large sum is to be devoted to the northern trans-Atlantic service. The Government a good many years ago decided that airships had no real value. Rightly or wrongly, after the untimely accident to R 101 they closed down their airship programme. I submit that there are good reasons for reconsidering that policy. The importance of this question has been brought to our notice by the tremendous illustration of airship possibilities which the Germans have given us, and there are certain facts and figures which the House may have omitted to notice and which might, I think, be usefully brought to their attention.
I have made a careful comparison of what an airship can do and the likelihood of what a seaplane can do on this route in regard to which the House is voting money to-night—because we are definitely voting money in relation to the North Atlantic route. The crossing of the North Atlantic is a matter which requires careful study, and I presume that it has already received careful study from whatever company is proposing to undertake this service. It is a very alarming study. Figures, which can be obtained by anybody, prove—and I think the view is supported by Colonel Lindbergh—that the extreme northern route, the Iceland-Greenland route, though shorter is impracticable and may be ruled out of consideration. The next possible route to be considered is the Ireland-Newfoundland route, and I ask the House to give attention to a comparison between airship performances and seaplane performances over that route and a comparison of costs as between two such services. The builders of the "Zeppelin" tell me that a quarter of a million would reproduce the "Hindenburg" quite easily, and I am informed that a comparable seaplane would cost £350,000. Then, when you come to consider what it could carry, you see that it could not carry half as much as a "Zeppelin." The actual figures are that a 134-ton seaplane would cost £340,000. If it was lucky, it might carry 32 people, and no freight, while,

on the other hand, a "Zeppelin" could carry 100 people and 10 tons of freight.
Then you have to make a comparison of these forms of transport, not only on carrying capacity, but you have also to carry your mind further and consider such things as speed, fuel, fog, and storms, and it is on the word "storms" that I would lay stress. If you are flying a seaplane which can just carry itself, its fuel, and a limited number of passengers, it must stick to its route. If it comes down in the Atlantic, it has not very much hope. It has either got to go through or dive, and we know what the latter means. On the other hand, an airship can drift away in a storm, it can go on with its engines almost stopped, saving fuel all the time, and come in safely round the base of the storm, which may be 600 miles away. That is the feature that will attract the public—safety rather than speed—because both are much speedier than any of our ships on the sea, and safety will win the day in the end. I am told by one expert airship man that he frequently chases after a storm so as to get into the tail of it and be taken along with it, so as to increase his speed. You cannot conceive of a seaplane doing anything of the kind; all that it can do is to butt through as best it can. I looked up what is the percentage on the various routes of storm, wind, and fog, none of which affect the airship in any degree at all. The other day the "Hindenburg" came across, and I read in the papers that there was some trouble, a nose-dive, and that all the crockery was broken. I wrote to the captain about it, and he wrote back and said that it was true to a certain extent, but that the man on the elevator wheel was a beginner who had come to them to be trained, and he was a bit careless in his working of the elevator rudder. It happened to be just before lunch, when all the tables were set, and so the crockery was broken, but he said:
In spite of that, he was butting into a wind of 60 miles an hour, and but for than little accident of broken crockery, the ship was as steady as when you crossed in it yourself three weeks before.
When you consider the risks of the North Atlantic route for seaplanes, I find—I could produce argument after argument in favour of the reconsideration of


the Government's airship policy—that the foggy days on the Ireland-Newfoundland route run into 30 per cent., there are 18 storm tracks on this route, and the 100 miles per hour winds run to about 22 per cent, of the days in the year. It is a problem which has not been sufficiently carefully considered, and I do ask the Government to reopen consideration of their airship policy, to devote a little of this money to reopening Cardington and getting together a staff. I am sure it will not be difficult to delve into this problem once again. The reason why I ask is that if we do not tackle it, we shall get left farther and farther behind.
In this connection let me say that only yesterday the "Hindenburg" came in, and I saw someone who had come across in it, and he said, "I wonder whether you people in Parliament know that two officers of the American Naval service were on board, one an admiral and the other his assistant, a captain." He gave me their names, but I have forgotten them. It was the same when I came over. The Americans are studying this thing with the greatest possible care. They realise that they have made mistakes in construction, as we did. They are not satisfied that the airship cannot fly, that it cannot be taken on by them. If it can be taken on by them, it can be taken on by us as well. Therefore, I think it is worth while asking the Ministry which is responsible for all forms of flying—and the word "airship" is just as much in the Bill as the word "aircraft"—to go into this thing with the greatest possible care. I find some curious statistics connected with civil commercial airship acitvity. One is that in 20 years no paying passenger has been injured. The only accidents that have occurred involving loss of life have occurred in experimental flights. A company in America called the Goodyear Company have four airships and they are training 26 pilots a year. Everyone of them who is trained on civil airships becomes a potential war pilot. Whichever way we look at it, other countries are doing more than we are. It looks like the story of aeroplane development on our military side spread over the last three years. We are just not doing things. We are letting other people do the things and we are hoping there will be sufficient time to catch up.

It is a dangerous policy to follow in these tricky days.
If it is not out of order, I would like to throw a consideration or two into the minds of hon. Members who wonder sometimes whether an airship has any military value. This is very little off the general subject of our Debate because, after all, the airship is capable of both commercial service and some military use. The military use was referred to shortly after the War by great naval experts, and both Admirals Jellicoe and Beatty committed themselves to saying that one airship was worth six cruisers. What they meant was that for convoy purposes they were invaluable. It seems to me that to have commercial airships which you can use for some other purpose at some other time is well worth increased consideration. It is said that the submarine greatly fears the airship. For this and other reasons I do not think the House should be put off in pressing the Government into developing the airship programme because some may think it useless for military purposes.

Rear-Admiral Sir MURRAY SUETER: Is the "Hindenburg" filled with hydrogen or helium, or with both?

Captain GUEST: Entirely hydrogen. The reasons are that it is cheaper and has an increased lifting power of 10 per cent. over helium. The fact that we were unlucky with R101 should not make us afraid to try again. I have been told things about R101 which frightened me in some ways, and I feel I must pass the little bit of information I have collected on to the House of Commons. I do so in perfect good faith. It is that the principal reason for its collapse was faulty construction. I have had it explained to me as an amateur that the valves were in the wrong place and were lateral instead of the other way. When the ship rolled she lost her gas and she went to the ground because she had not the buoyancy necessary to carry her own weight. I mention that because I think we can learn lessons from other people. I would not be averse as a taxpayer From giving an order to Dr. Eckener to build us an airship. I would not be too proud to do that. Other countries are buying our aeroplane engines because they know we can make them better, and why should we be too proud to buy


a commercial machine of that sort from the country which can build it? When we are voting enormous sums of money—to be handed over to I do not know whom—to various firms whose chief objective is to cross the Atlantic by seaplanes, this other way of getting over should be taken into serious consideration.
I should like to draw attention to a little further information which I have collected, and that is that negotiations are going on to-day which, if they are concluded—and there is no reason why they should not be—will mean that in four or six years there will be four great countries flying the oceans with their ships—Germany, America, Holland and Japan. If that is anywhere near true, and in my belief it is true, it is the business of the Ministry to give the House some answer on this important point. Can we afford to lag behind? We are not so poor that we cannot afford to keep pace with the activities of other countries. It is all the greater pity when it is remembered that at one time we were a long way ahead of other countries. In 1919 we sent the R34 to America successfully, and then, shortly after the loss of the R101, we closed down. We have really wasted the nine years' start we had in airship construction, management and navigation, and I hope that this Bill, with all its good qualities, will be accompanied by some definite statement from the Ministry that this point will not be lost sight of, at least that further investigation will be made. I had the good fortune the other evening to be supported by the late Secretary of State for Air, who said that he himself had been in favour of carrying on further experiments of this nature. Therefore, I hope that the Ministry, who have been able to produce a magnificent Magna Charta for civil aviation, will not allow themselves to go down in history as having been not big enough and not brave enough to consider competition in airships such as is being undertaken by other countries.

11.43 p.m.

Lieut.-Colonel MOORE-BRABAZON: We have now got to the Third Reading of this Bill, and I think that those of us who are interested in air matters should

pay our tribute of thanks to the Patronage Secretary for the time of the House which he has given to us. I should like to thank him for the fact that we had the Committee stage on the Floor of the House, and that we have had time for full consideration of the Measure. My right hon. and gallant Friend has pleaded the cause of the airship. I do not think this Debate is an occasion to go into that area. But I was on the commission that investigated the loss of the R101, and I cannot admit for one moment that that airship came to ground through lack of buoyancy. You can bring an airship down tail first through lack of buoyancy, but that airship came down nose first, and that is inexplicable except through some catastrophe which has never been explained.

Sir M. SUETER: Was it not because the netting which held the gas bags down had been released to give greater capacity? The gas bags chafed against the rigid structure and she lost gas, and that was the cause of the loss of buoyancy.

Mr. DEPUTY-SPEAKER: I did not interrupt before, but we cannot get into a debate on what caused that disaster.

Lieut.-Colonel MOORE-BRABAZON: I could answer all those observations of the hon. and gallant Member, because I am very familiar with this particular case. My hon. and gallant Friend should read the report again. There were not even nets on the gas bags.

Sir M. SUETER: Yes.

Lieut.-Colonel MOORE-BRABAZON: My hon. Friend who is leading the Opposition made two points on which he asked for an answer. One was, Why pay money to civil aviation? That is a big point which I do not think ought to be answered by a private Member. It is to be answered from the Treasury Bench ex cathedra, with all the authority of the Treasury Bench. His second point was, Why not nationalise? A true Socialist, I suppose, would like to nationalise everything, down to children, and the true Conservative would like to run everything by private enterprise, down to private armies. There are hundreds of things lying between those two extremes upon which it is very difficult to take a decision, and I think this matter is one of


them. The choice between nationalisation and running by private enterprise is a very narrow one. I quite agree with the hon. Gentleman that if you are to take the line of running it by the State, it is as well to do it at the beginning, and not later on.
We ought to pay tribute to Lord Londonderry, because it was due to him that the Gorell Committee was set up, and that at least part of civil aviation was freed of control by the State which was having a very severe effect upon it. The insurance schemes seem somewhat experimental and perhaps not wholly satisfactory, but they are a great experiment and we have given great powers to the Ministry to control our civil aviation as a great commercial asset. It is on the great air line routes that the importance of this Bill must rest.
We can refresh ourselves with this thought, that Imperial Airways, although a chosen instrument of the Government, is not the only instrument. There are to be competing companies. Although I voted against the Second Reading of the Bill, I must thank the Government for inserting, not under tremendous pressure, this Clause, which puts before this House any agreement which the Government may make with private companies, and allows us to bring it under debate, even after 12 o'clock. That point was not included in the Bill when it started, and I again thank the Government very much for putting it in. I am still not wholly satisfied with the arrangement that has been come to. I know that the arrangement with the Imperial Airways is, so to speak, a hybrid, a mixture of Socialism, private enterprise and competition. I suppose the genius of this race for compromise may make a success of it; but I am not frightfully happy about it. I still think it is to this country that oppressed nations turn when they say their prayers; they look upon us as standing for more than any of them.
In the development of civil aviation, we are going to send from this country a piece of England, and this country will be judged by what arrives from it out there. I would like to be assured that when an aeroplane arrives from this country it is the best and the fastest in the world. It has to reflect and to be a complete example of the genius of this Country, its great workmen and its great

engineering. I do not quite see how you are always to have the best achievement if you try to combine private profits with running a great Imperial air service. The excuse will be constantly put before us that they cannot afford the best machines because they have to pay dividends. We have had that said already, and we are very inclined through that to lag behind. I do not see how we are to bring that before Parliament, how we are constantly to urge these lines to be really up-to-date, unless we all become shareholders in Imperial Airways and turn up at the annual meetings, which would not be a satisfactory way. We have launched this Measure to-night. Whether it will be air-worthy or not time alone will show. I would like to have seen more imagination put into it. This is one of the few times we have dealt with civil aviation apart from its distressing connection with war. I hope that this Measure will allow us to see in our time superlative air lines running from this country and linking up all parts of the world. I wish the Measure "God-speed."

11.51 p.m.

Sir M. SUETER: The hon. Member for West Islington (Mr. Montague) said that millions of people in this country would never get any benefit from the subsidy that is to be paid under this Bill. In my constituency we grow a lot of tomatoes, and I hope one day to see them transported by air all over the country. That would benefit even the poorest people, because the tomatoes would be transported cheaply and the people would get cheap tomatoes. I want to see the carriage of light merchandise by air, as is done extensively and cheaply by American airways, to the benefit of a great many people. The subsidies under this Bill are small compared with the subsidies given to the agricultural industry. I doubt if we are allowing enough money under the Bill to develop civil aviation properly.

Mr. MONTAGUE: The hon. and gallant Member uses the illustration of the subsidies to agriculture. Those subsidies have not succeeded in providing cheap milk and other produce for the people of this country.

Sir M. SUETER: I was talking about the transport aspect only, and of civil aviation being developed so that light merchandise could be transported cheaply for the benefit of the people. I agree


with the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) in saying that we should pay a tribute to Lord Londonderry and the Gorell Committee for the hard work and investigations which they have brought to fruition in this Bill. I congratulate the Under-Secretary of State for Air on the way he has handled this Bill. I would like to ask him a question about the North Atlantic service. We saw two machines at Messrs. Short which we were told were to be converted for flying the North Atlantic. I would have thought that for a big problem like flying the North Atlantic a special machine would be designed, instead of Empire route machines being converted. It is a big problem, and it ought to be tackled by having a special machine built for crossing the Atlantic. Has the Under-Secretary any design for that now? When we visited Messrs. Short's works I did not see any new design under construction at all. There were 28 of one type, except for the two machines which were being given extra tanks to increase their range up to 3,000 miles. In our submarine days we always used to have other types being built, like the A, B and C class submarines, one better than the other; and the same was the case when we were developing flying boats at Felixstowe. Is the Under-Secretary going on with that? Is a machine design being got out for crossing the North Atlantic? I should also like to ask when the trials are going to take place of the machines which are under construction at Messrs. Short's works for flying the Atlantic; and when the experiments are to be carried out with Messrs. Short's special type of machine for flying the Atlantic These have been a long time under construction, and it is time we heard more about the trials.
With regard to the Southern Atlantic, we have been told that five schemes have been submitted, and that these five schemes have been gone into and referred back to the proposers; but all this is taking months, and I submit that we might speed up a little, and try to get an air route established across the Southern Atlantic. I have said before that I had a letter from a naval captain in the Argentine in which he said that our prestige was suffering because we had

not a line running out there, and British people in the Argentine objected strongly to their letters coming by German and French air mails, and were asking why they could not come by a British air route. I should be glad if the right hon. Baronet would he kind enough to answer these questions.

11.58 p.m.

Mr. GARRO JONES: While I should like to associate myself with those who have expressed appreciation of the labours of the Gorell Committee, I regret that we here are not able to express similar appreciation of the results, because we are not enamoured of the principles embodied in this Bill. I do not intend at this late hour to keep the House for many minutes, and there are certain aspects of the Bill which I will content myself with summarising in order to make clear the attitude that I, at any rate, take towards it. In the first place I would point out that the title "Air Navigation Bill" is a complete misnomer. The Bill not only deals with air navigation—indeed, it deals very little with air navigation—but it is an Air Planning Bill, it is an Air Subsidy Bill, it is an Air Insurance Bill, it drags in several other matters relating to the Air Force, and it deals with the wages and conditions of employment of persons employed in various activities of civil aviation. I think there could be no more unsuitable name for it than "Air Navigation Bill."
I should like it to be on record that I have said that this Bill ought not to have been brought before the House as one Measure. The House has not had the opportunity of giving adequate consideration to all the principles involved in the Bill, and, indeed, anyone who wished to make a comprehensive or even an adequate Third Reading speech on it would have to be something of a debating athlete. I do not intend at this late hour to attempt to qualify for that distinction, but it ought to be made perfectly clear that we do not agree that the Bill can be looked upon as a magnificent charter of civil aviation, as it was described just now by the right hon. and gallant Member for the Drake Division of Plymouth (Captain Guest). The hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) wanted our civil avia-


tion to be an example to the rest of the world; he stated that this country stands for more than any other country. When one wishes to discontinue the standing position, one does so either to advance with rapidity or to retire. I can only agree with him in the latter sense, that this country has stood for a very great deal in the sense of declining to offer resistance where it ought to have resisted.
May I say a word about the responsibility of the State directors? We on this side are very disappointed with the right hon. Gentleman in that he has failed to grasp a great opportunity for bringing the industry under State control. We want to ask him to give us as much as he can of that principle. The first thing he can do is to ensure that the State directors on the board of the greatest civil aviation company, Imperial Airways, are instructed as to their duties. We have had most disquieting examples in different Debates of the way in which Imperial Airways has looked upon its national responsibilities. We found that it regarded itself as in the position—to use a colloquial expression—of a dog in the manger and viewed with envy any attempt by smaller companies to impinge upon what it considered to be its monopoly on any air route. We even found that it declined to give assistance in the removal of wreckage. Carrying that principle a little further, though no such example was quoted, it would decline to assist in such measures as extinguishing fires. I hope the right hon. Baronet will not belittle this. It was made clear that Imperial Airways is not alive to its national responsibilities, and the only way we have of bringing those responsibilities to their notice is to instruct the State directors to see that they are observed.
A further defect in the Bill is its provisions in regard to insurance. On the plea that the paucity of premiums greatly increases the liability to be borne by one company in the case of a serious accident, the Bill completely abrogates every principle of insurance that has been on the Statute Book before, except in the limited case of merchant shipping, where the analogy is not a correct one. If the Bill had approached the principle of insurance for aircraft in a proper manner, it would have taken it out of the hands of private

enterprise altogether. If you have four, five or six companies splitting up the business, obviously upon one of them one accident might fall with extreme severity, but if you take the total amount of premiums which would be paid by every aeroplane in flight and offset against them the total amount of damage done by every aeroplane in flight throughout the year, it would be very much easier to arrive at a better actuarial premium and make it a more businesslike proposition.
The Bill does a great deal, but what it omits is perhaps even more serious, because we have contended—and I believe we have right and wisdom on our side—that the real way to make civil aviation prosper is to make it pay. Profit, as our system stands, is the first and final criterion of success. We temporarily accept that principle and say if you want to make civil aviation prosper you must make it pay. If you wish to make it pay, the only way is to expend more money upon research in order to design machines which will carry a paying load without subsidy of any kind.

Mr. DEPUTY-SPEAKER: I would remind the hon. Member that on the Third Reading the House can discuss only what is in the Bill, and not what is not in the Bill.

Mr. GARRO JONES: I apologise to you, Mr. Deputy-Speaker, for having been diverted to that interesting theme. I have a list here containing a number of things which this Bill does not do, but I believe that I can make my position clear by saying that the Bill does a great number of things which it ought not to do, and that it does not do the things which it ought to do. I will abstain from quoting the Prayer Book, but we all know how the ancient words put it. Though the right hon. Gentleman has lost the opportunity of putting a State Measure upon the Statute Book, he will at any rate do one thing before he quits his present office: he will inaugurate an inquiry and provide a plan, so that when his successors come, as inevitably they will, to make this a State enterprise, he will have sown the seed for the harvest which we shall reap.

12.8 p.m.

Major HILLS: The, hon. Gentleman the Member for North Aberdeen (Mr. Garro Jones) and the hon. Gentleman the


Member for West Islington (Mr. Montague) pleaded for a nationalised Air Service, and both of them used reasonable arguments. An enterprise partly private and partly subsidised is easy to attack, but it has certain advantages. I think that in this case the advantages outweigh the drawbacks, but I would remind hon. Gentlemen opposite that there is nothing that is final in this world. In my lifetime I have seen a very great extension of State action. Services are now given by the State which were not thought of in my boyhood. If there is a better way of running a great service like the Air Service—a better way than a subsidised service—I believe that the British people, with their political genius, will recognise the fact.
The hon. Member for North Aberdeen made some criticism of Imperial Airways, and I, too, want to deal with the point that was made by my hon. Friend the Member for Duddeston (Mr. Simmonds), who, I think I can show, quite innocently misled the House, or rather was misled himself, in the account that was given to him of the accident which took place at Croydon Aerodrome. What happened was that an aeroplane crashed because the pilot had not wound down the under-carriage. According to the complaint made by the company who owned the aeroplane, they applied to Imperial Airways to remove the wreckage. They actually started upon the work, but when it was discovered by the official of Imperial Airways that they were helping a firm under their boycott, they immediately instructed their men to discontinue the work. Therefore, as my hon. Friend very properly said, they not only did not assist in taking the aeroplane to a place of safety, but they left a danger spot on the aerodrome.
I have taken the trouble to find out exactly what happened, and I think that my hon. Friend will see that he has been rather seriously misled. At a late hour on the night of 8th June an aircraft belonging to Air Dispatch was damaged in the way that I have stated. The foreman of Imperial Airways night shift was asked by Air Dispatch to bring the damaged aircraft to the shed. He went with a tractor and two or three men to the damaged machine but found that it could

not be towed without risk of further damage, and that a considerable amount of work would be required to jack it up on a trolley before it could be removed. At that time the night shift of Imperial Airways were fully engaged in preparing their own aircraft for the next day's service and could not without dislocation allow their own maintenance work to be held up for other work. I need not remind the House of the immense importance of maintenance work which goes on always before a flight is begun. The foreman, therefore, asked the Air Port Control Officer whether he considered the damaged machine was a danger. The House knows that the Air Port Control Officer is not an employé of Imperial Airways, but is employed by the Air Ministry. The Air Port Control Officer replied that it had been marked with red lights and he did not propose to ask assistance of Imperial Airways in removing it. Therefore, the foreman of Imperial Airways did not feel justified in taking the men on the night shift off their regular work, but they did lend to Air Dispatch all the plant and tools they desired, including powerful jacks of various types, timber and other appliances. I think the House will admit that is a very different story. The decision to leave the wreck on the aerodrome was not taken by Imperial Airways but by the Air Port Control Officer and Imperial Airways did all they could, in view of their own work, to assist in the salvage.
The last speaker alluded to the charges made against Imperial Airways. On that I plead in aid what the hon. Member for West Islington said. He said air transport must be a monopoly, and when you have a great service that is built up partly with the taxpayers' money and partly by shareholders' money you cannot allow people to come and butt in and have the cream of your traffic and disorganise your own traffic. I am sure the House will admit that. For my part I entirely accept the assurance of the right hon. Baronet that he will see that these somewhat difficult relations between the subsidised company and the unsubsidised one are properly regulated. I would also remind the House that there are two Government directors on the board of Imperial Airways. What is happening is that the service is built up


and the goodwill is created, and then perhaps some unsubsidised line comes and tries to push off some of its passengers on to the subsidised line. It pushes off the least profitable part of that traffic and expects the subsidised line to accept passengers and goods on uncompleted obligations. I mean by that that the contract is not made by the subsidised line but by the unsubsidised, and anybody who knows anything about the law of national and international air transport knows what a complicated matter it is. I would plead that after consideration, the State has given this monopoly and is going to give some more monopolies and on that monoply public money will be borrowed. I should like to say a word to the hon. Member for Frome (Mrs. Tate). She has been one of the most active critics of Imperial Airways.

Mrs. TATE: And still is.

Major HILLS: She quite frankly told the House that she hoped to be interested in, and I am sure she will take an honourable and distinguished part in, the trans-Atlantic air service. I sincerely hope she will and I wish her well. But may I say that when she comes to work that service and is faced with all the practical and immense difficulties of building up a great air transport line, I think she will find that criticism is one thing and action is another. I had the inestimable advantage of sitting on the Board of Imperial Airways when they were starting, and I may tell the House that the difficulties at one time seemed to me almost insuperable. It has been a very difficult thing and a very great performance for that company to have built up a great service which, as the hon. Member for West Islington has told us, flies every day three-quarters the circumference of the world at the Equator and serves 25 different countries. It is a very easy thing in an enterprise of this sort to find faults here and there, but I put it to the House that the great fact remains that there is a service, and it is operating efficiently and with success. Whether some other form of control, such as State control may come, I do not know, for I am not a prophet, but what I do know is that nobody can have anything to do with that service without feeling an immense interest in air transport. I want to see it en-

couraged, and to see all such enterprises encouraged. I want to see us lead in the air as for many centuries we have led on the seas.

12.17 a.m.

Mrs. TATE: I am not, like the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) withdrawing my objection to the Bill because I believe it is not nearly as much a Magna Charta for civil aviation as it is a Magna Charta for Imperial Airways. The hon. Member for West Islington (Mr. Montague) begrudges the money for commercial aviation and cannot understand how it affects the ordinary man in this country. I think the whole of our future trade and the whole of our future relationships with our Empire are bound up with the development of commercial aviation. It is, therefore, very difficult to understand how the ordinary citizen in this country is not to be benefited by the development of air services. It is because I am sure that under this Bill, which gives to Imperial Airways this enormous subsidy for as long a period as another 15 years, that we shall not have the development of civil aviation for which we have a right to hope that I propose to vote against this Bill to-night. I admit that in some ways Imperial Airways has built up a magnificent service and I admit that it is, compared with many other lines in the world, a very safe service, but I think that we are very rash to hand over this subsidy for 15 years without the power of revision and without any check as to the services that we are being given.
The right hon. and gallant Member for the Drake Division of Plymouth (Captain F. Guest) mentioned that £900,000 was to be devoted to the schemes connected with the Atlantic, and he spoke as though the North Atlantic route were still open to tender. That route is already given to Imperial Airways, and I may say that another route given to Imperial Airways is the West Coast of Africa. One of the things to which I object is that Imperial Airways has the West Indies, the West Africa and the North Atlantic routes for 15 years irrespective of whether it runs a line or not. Once we have passed this Bill, we shall have no power to say whether the subsidy shall continue to be given and whether those routes shall be con-


fined to Imperial Airways if it has not utilised its power to run services on them.
The right hon. and gallant Member for Ripon (Major Hills) mentioned the South Atlantic scheme. We understood from the Under-Secretary that the scheme was open to tender and, as the House knows, five schemes were submitted, with one of which I was connected. The House also knows that all the schemes were returned to the applicants by the Air Ministry. I was lucky enough to see several of the letters, apart from the one which was connected with my own scheme, and I can only say that anyone who has read them cannot possibly suppose that the Air Ministry at the present time have the smallest intention that the South Atlantic route shall be run at an early date, and certainly not by any of the companies which have tendered for it. Within the last few days I have had information from one of the largest financial houses in this country to the effect that they understand that that route is, in fact, already given to Imperial Airways. I do not mind who has the route, but I do say that it is imperative that we should have a service across the South Atlantic. It is deplorable that other countries should to-day be flying the South Atlantic, that the Germans should even be flying the North Atlantic, and that this country should not be flying on either route. The right hon. and gallant Member for the Drake Division of Plymouth said that we ought not to be too proud to buy an airship from Germany if we feel that they are ahead of ourselves in the building of airships. I say that we ought not to be too proud to copy the airships or the seaplanes of any other country if they are superior to those which we ourselves produce. What matters is that we should have the best machines obtainable in the world and make them ourselves at the earliest possible moment; but we cannot afford to allow the air routes of the Atlantic to be flown by other countries because we are not capable of producing machines to fly them ourselves.
An hon. Member has asked when we are to expect the trial flights of the Short machines. As the Under-Secretary told me in answer to a question to-day, the trial flight of the first of the Empire boats is expected to take place in a month's time, but we know that that is already

four months later than was originally intended. I do not believe that, good as those boats are, they are comparable with the seaplanes being built to-day in other parts of the world and flying in other parts of the world. I think it is regrettable that Imperial Airways should have paid the dividends it has paid before it had managed to make its aeroplanes at least comparable to the best being produced in other parts of the world. No other company pays dividends unless it has kept its plant up-to-date. I believe that Imperial Airways has fallen too far behind in the type of machine which it allows to be flown on its routes, and if we pass this Bill we may he sure that it will be able to go on in the same way for another 15 years at least. I think this is a matter which ought to come before the House for revision in seven years' time and that is why I intend to vote against the Third Reading of the Bill.

12.26 a.m.

Captain PLUGGE: I would like to intervene in this Debate because the question has been raised of the value of civil aviation in the furtherance of military aviation, because if I may be permitted to say so, I had the opportunity of gaining a great deal of experience on that subject, as a member of the Inter-Allied Aeronautical Commission of Control in Berlin, which commission framed the rules for the limitation of German civil aviation in order that it might not be used for military purposes. In past debates and indeed in this present one there appears to have been an assumption that the subsidy of £1,500,000 for which power is sought under this Bill would be allotted in totality to Imperial Airways unconditionally and for the full period of 15 years. That assumption has been dispelled by the pronouncement by the Under-Secretary for Air that the Fisher Committee was set up for the specific purpose of watching the progress and development of our international air routes and with a view to seeing that the money provided and services available by way of assistance was utilised in the most efficient way possible. I personally consider and hope that the Government will continue on the advice of that committee to allow the major developments of our Imperial air services to be carried out by Imperial Airways. I am sure that many hon. Members here


who recently visited my constituency and had the opportunity of inspecting the magnificent flying boats being built for Imperial Airways by Messrs. Short Brothers at Rochester, will share my view.
The speeches of hon. Members opposite would lead one to believe that vast profits can be made on long-distance civil aviation routes, especially if such enterprise could be supported by Government subsidy. The reply to that suggestion is to examine the financial returns of the principal aircraft operating companies. In so doing we find that the highest dividend paid by Imperial Airways never exceeded 3.6 per cent. It is true that Imperial Airways shares stand rather high at present but that is merely indicative of confidence of speculators in the future of civil aviation and of their faith in the generosity of the Government subsidy. To divide the subsidy among a, great number of small air lines in all parts of the Empire would not be conducive to securing an improved and valuable Empire air service. As we have seen from various examples, it would only tend to increase the cost per ton mile and either decrease the chances of greater speed or increase the risk under which the services run. If we look back to the year 1924, the date of the formation of Imperial Airways, we see that the Government then found themselves faced with the disagreeable situation of having four competing companies, all on the verge of bankruptcy. The method adopted was the formation of a single company which could enjoy the maximum traffic available and make the most efficient use of whatever subsidy was available from the Exchequer.
What is the financial result of that policy? There has been a long-term Government contract and a subsidy on a diminishing scale. If we examine the records of the committee instituted by the League of Nations, dealing with the subsidies granted to civil aviation in different countries, we find that the system adopted by this country of subsidising Imperial Airways is a very satisfactory one. We find that in Great Britain the subsidy amounts to 3s. 5d. per ton mile; in Germany, 4s. 10d.; in France, 8s. 11d.; and in Italy, 12s. 5d. per ton mile. These figures show that our policy of concentration has to date enabled us to work

far more efficiently than other countries. All this shows that on empire routes there is nothing to be gained by allowing one British company to compete against another. We need to concentrate all our forces on overcoming as effectively as possible the competition of foreign air services, and that can never be done if we dissipate a large part of this £1,500,000 on supporting cut-throat competition among our own nationals. From where can we learn a lesson? We might turn towards the United States of America, which is often quoted as the most forward country so far as civil aviation is concerned. I had the opportunity of visiting the United States last year and of crossing from New York to California, and there is no doubt that the Americans have got a very excellent system of civil aviation. But what is it costing them? Here again I would like to quote some of the figures. These figures are given by the Federal Aviation Commission. This commission published figures in 1935. We read that between the years 1927 and 1929 over 500,000,000 dollars were invested in civil aviation—well over £100,000,000. Moreover, during the last seven years up to 1933 the Federal Government itself contributed £25,000,000 on air transport. That amounts to £3,000,000 a year. Now what do the Federal Aviation Commission state in their findings:
It appears in short, that financial disaster is in the making for a large part of the present air transport system. Whether it makes its appearance in six weeks or six months or longer we cannot state, but we cannot see how it can be postponed indefinitely.
That is the position which has arisen in a country where competitive bidding in the air mail service was encouraged. Now for the final conclusions of the Federal Aviation Commission. This reads:
The, present competitive bidding in the air mail business is of doubtful value, and is more or less a myth. If we throw these matters open to competitive bidding, you will find promoters coming in and wanting to bid for contracts, having no knowledge of the cost, having no knowledge of the factor of obsolescence, having no knowledge of the amount of equipment they have to throw away each year because of the improvements in the art, having no knowledge of the bad luck and the unusual losses that are not directly incidental to aviation.
The concluding sentence reads:
We believe that we should be better off if we could pick our man in the present


state of the art, rather than to submit the results to competitive bidding.
I think, therefore, it would be most unfortunate if we were to expose to the risks of competitive tender the management and imaginative scheme put forward last year by the Air Ministry and Post Office for developing a system of frequent and cheap air mails to all parts of our Empire. Visualise for a moment the wonderful opportunity the United States affords to civil aviation. Here is a land 3,000 miles across with over 100,000,000 people all speaking the same language, with no customs and no frontiers. Without trouble beacons can be erected right throughout the land 10 to 20 miles apart with their white revolving beam and their red signal continuously flashing the morse code letter indicative of each position. Yet by advocating this competitive bidding they find on trial that it has not proved a success. We have another example this time much more close to us. It is an example provided by the problems of London transport. When I came back from the Spa Conference, where I was one of the aeronautical delegates, I was asked by the then hon. Member for Ashton-under-Lyne, a genius in transport matters, now Lord Ashfield, to join his group of underground companies. This group then controlled the London General Omnibus Company. We were faced on the roads of London with the competition of what was known as pirate omnibuses.

Mr. SPEAKER: We cannot go into London Transport.

Captain PLUGGE: I apologise, Mr. Speaker, but I wanted to make the point that encouraging small companies taking the cream of the transport was not a thing to be advocated, and eventually it was dispensed with in this field, too. I think, therefore, it would be a great disadvantage if we were to allow the money of this subsidy to be dissipated instead of being used to place British air transport on the trunk routes of the Empire beyond the influence of foreign competition. I would like to say in conclusion that the Under-Secretary of State for Air deserves the heartiest congralulations of all those who are most interested and concerned in the wellbeing of British civil aviation, for his hard work and pertinacity in carrying this

Bill through this House, and I hope that in future years when these air lines run safely and regularly between the various parts of the Empire and to the far ends of the earth, and when our system of Empire air communications is the envy of the world and a source of new strength and wealth to our Imperial heritage, his responsibility for its inception will not be subject to the oblivion of time.

12.35 a.m.

Mr. PERKINS: There is one matter I wish to bring to the attention of the Government. I am a regular reader of a periodical called the "New Yorker." I see that the Under-Secretary, by the look on his face, is also a regular reader of this most interesting paper. In its edition of 6th June of this year there is an advertisement which has been paid for and inserted by Imperial Airways which boosts its new flying boats, and after a long description of the flying boats it finally ends up by saying the weight fully loaded will be about 20 tons and the speed about 200 miles per hour. I want to ask the Under-Secretary whether that is true. On the information I received when we went to see those new flying boats at Short's this advertisement is deliberately misleading because these flying boats will not cruise at anything like 200 miles an hour if they are fully loaded. We are giving the Minister power to-night to pay out to Imperial Airways a sum up to £1,500,000 every year. I want to know whether any proportion of that money goes in advertising. I want to know whether the British taxpayers' money is being used deliberately to mislead the American public. I want to know also whether these advertisements are being inserted with the knowledge and consent of the two Government directors on the board of Imperial Airways.

12.38 a.m.

Mr. SIMMONDS: I would not have intervened had it not been for the observations of the right hon. and gallant Gentleman the Member for Ripon (Major Hills). He referred most courteously, I think, to a speech I made on the Report stage, and he thought that I had allowed myself to be misled in a letter that I read to the House. I would like to say that the letter I read was a letter written by the managing director of an


unsubsidised air transport company to the civil air transport officer at Croydon Aerodrome on 8th June, a copy of which was sent to my right hon. Friend the Under-Secretary of State for Air on 10th June. On 25th June I drew the attention of this House to that letter. I took such precautions as any member of this House would take to see that it was a bona fide letter substantially accurate, and as a result of a letter I received last night from Imperial Airways, much of which my right hon. Friend quoted, I have spent most of the day investigating the matter further to see whether I ought properly to comply with the request of Imperial Airways that I should in some way withdraw my association with that letter. I can only say that as a result of all my investigations to-day I find that letter still to be substantially accurate.
I believe the Under-Secretary of State for Air is regarding this matter as a serious one, and is investigating it carefully, and I do not feel therefore that I am called upon to worry the House with many details to-night in refutation of the information which my right hon. Friend gave. I do think this is a most important matter, because throughout the years of subsidy agreements, all subsidy companies should appreciate their responsibilities to the State and to unsubsidised companies, and I am very gratified that the Under-Secretary for Air has given the House a most categorical assurance that he will watch the subsidy agreements to see that national interests are not sacrificed to the commercial interests of these companies.

12.42 a.m.

The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): At this late hour and in view also of the fact, on which many hon. Members have commented, that the discussions on this Bill have been very full, I do not think the House would wish me to detain them very long. I, therefore, propose, as briefly as I can, to deal with a few specific points that have been raised. The hon. Member for West Islington (Mr. Montague) made again, with his usual force and eloquence, a plea for the nationalisation of these State air undertakings. I would like to repeat what I said to him on the Committee stage, that although we do not in any way rule out the possibility of his policy coming into force in some year in the future, we still think that at the present moment and in present circum-

stances, and also in view of the very keen commercial competition we have to face and meet all over the world, our present policy is the best one. He has commented on the millions which the taxpayers were contributing towards these schemes of ours, but I think many more millions of the taxpayers' money would have to be contributed if it were a State-run undertaking, for you would then have to run the risk of the losses which have been more noticeable than profits up to now.
The hon. Gentleman also asked me what was the object of the development of civil aviation. He said that, of course, this was a delightful thing but that it was not really important or essential. I should have said that in the case of a great Empire like ours, the speed and ease of communications and the development of them was very essential for us to keep our Empire together.

Mr. MONTAGUE: I cannot let that pass. It may have been my fault, but my purpose was not to question the value of civil aviation but actually to ask the question, What was the purpose of it? in order that we should discuss what was the purpose, so that we might be able to know where the money was going.

Sir P. SASSOON: I hope I did not miscontrue what the hon. Gentleman said. I think he will agree with me that it is very essential to a great Empire like ours. He also commented on a remark of mine that as a State undertaking it might prove to be too cumbrous a unit. He asked why, if it is not too cumber. some for Imperial Airways, it should be for the State? But it is because we realise that Imperial Airways will have quite enough on their hands that we are proposing in future to give subsidies to other companies on other lines.
The question of insurance was also raised by him and by the hon. Member for North Aberdeen (Mr. Garro Jones). While, of course, I do not wish to go into the whole matter again or to try to make out that the scheme is a perfect one, it is as good a one as we could devise in the face of the difficulties. It is quite obvious that although one would like to see unlimited liability for loss of life, on the information we have received it would certainly mean a serious increase in premiums. If, however, at some future date it is possible to review the whole policy, there is no reason why


a short amending Bill should not be brought in, as has been suggested. There is actually at the present time a committee sitting at the Board of Trade investigating the whole subject of insurance.
The right hon. and gallant Member for the Drake division (Captain Guest) made a very interesting contribution towards the Debate in the shape of a plea for airships. I may perhaps in a few words remind the Committee of what has been the policy of the Government. After the disaster to the R.101 it was decided that we should hold a watching brief for the next few years until the possibilities of airship development were more crystallized than they were then, and to see what happened in America and in Germany. We know that the two American airships "Akron" and "Macon" met with disaster, and the "Hindenburg," which was supposed to have been launched last year was not launched until this March. Therefore the review we intended to have last year had to be put off. I would like to assure the right hon. and gallant Gentleman, without going further into the matter, that we are considering the matter very closely at the Air Ministry, and as soon as we think airships have proved themselves a useful and essential instrument we shall certainly embark on them again. I would like to thank him for the very interesting and important information he was able to give us about airships.
The hon. and gallant Member for Hertford (Sir M. Sueter) asked me two questions—whether the flying boats he had seen at Short's, fitted with extra tanks, were the only ones which we were developing for the North Atlantic route. We know perfectly well the difficulties that confront us in that venture, and of course we shall have flying boats specially built for it. These two flying boats which have been fitted with extra tanks are for purely experimental purposes and will soon, I hope, be able to embark on their trials. He also asked me to speed up the South Atlantic route. As he knows, several schemes have been submitted to us and I think, although it may seem there has been some delay in going ahead and coming to a conclusion on the matter, it is a

compliment to those who have submitted the schemes that we have considered them so closely and with such care.
The hon. Member for North Aberdeen reminded the House of a remark made on the last occasion about an accident which occurred at Croydon and the action or lack of action by Imperial Airways. All I would like to say on that is that I have received an answer from Imperial Airways which seems to show they have a clear case as far as they are concerned, but I want to wait until we get a counter-reply, and I can assure the House that the thing will then be sifted absolutely to the bottom.
The hon. Lady the Member for Frome (Mrs. Tate) developed an old theme with all the charm of novelty and I do not propose, nor would the House wish me, to cross swords with her in defence of Imperial Airways at this time of night. I would however like to correct one misapprehension. She seems to think that Imperial Airways are competitors for the South Atlantic route. That is not the case. Any schemes for the South Atlantic route will be considered—except any scheme that comes from Imperial Airways. We are certainly not too proud, if necessary, to order a seaplane or a flying boat from any country if we thought it would be better than ours.

Captain GUEST: Or an airship?

Sir P. SASSOON: Or an airship. But I think our industry is capable of building flying boats, or aeroplanes, as good as, if not better than. anybody else in the world, as I think the hon. Lady will admit in years to come. One more word in connection with the quotation which the hon. Member for Stroud (Mr. Perkins) read from "The New Yorker." As he said rightly, I am usually a regular reader of "The New Yorker," but I seem to have missed the copy from which he quoted. As far as the information which it contains regarding the new Short flying boats is concerned I would say it is substantially true. Their top speed is very nearly 200 miles per hour. They do not cruise at that speed, and the advertisement did not say that. Their cruising speed is over 150 miles per hour. They have a top speed of between 190 and 200 miles per hour and they carry a load at that speed of very nearly 20 tons. I think that for an advertisement, it is


much more accurate than any advertisement I have seen for many a long day. Although he has not asked me I would just like to give him a re-assuring bulletin about the Heston gasometer. I expected him to inquire about that. I have been informed that arrangements have been made whereby the upper perimeter of the gasometer will be lighted by eleven lights and there will also be a centre light on the ventilator. They will be flameproof lamps and they will be linked up on two separate circuits to lessen the chance of failure owing to a breakdown. The central light on the ventilator will also be duplicated. I hope

the installation will be done within three months.

I would say in conclusion that I think this Bill is a very necessary Bill and that it has certainly been made into a very much better Bill by the friendly criticism and help which my learned Friend and I have received from all sides of the House. In thanking them again for the assistance they have given, I hope they will now give us the Third Reading of the Bill.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 130; Noes, 54.

Division No. 265.]
AYES.
[12.55 a.m.


Acland-Troyte, Lt.-Col. G. J.
Furness, S. N.
Orr-Ewing, I. L.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Gledhill, G.
Palmer, G. E. H.


Anderson, Sir A. Garrett (C. of Ldn.)
Glyn, Major Sir R. G. C.
Penny, Sir G.


Anstruther-Gray, W. J.
Gower, Sir R. V.
Perkins, W. R. D.


Apsley, Lord
Graham, Captain A. C. (Wirral)
Petherick, M.


Aske, Sir R. W.
Greene, W. P. C. (Worcester)
Plugge, L. F.


Atholl, Duchess of
Guest, Capt. Rt. Hon. F. E. (Drake)
Porritt, R. W.


Baldwin-Webb, Col. J.
Guinness, T. L. E. B.
Ramsay, Captain A. H. M.


Balfour, Capt. H. H. (Isle of Thanet)
Guy, J. C. M.
Rankin, R.


Barclay-Harvey, Sir C. M.
Hannah, I. C.
Reed. A. C. (Exeter)


Beaumont, M. W. (Aylesbury)
Hannon, Sir P. J. H.
Rickards, G. W. (Skipton)


Bird, Sir R. B.
Harbord, A.
Ropner, Colonel L.


Blindell, Sir J.
Heilgers, Captain F. F. A.
Ross Taylor, W. (Woodbridge)


Bossom, A. C.
Hepburn, P. G. T. Buchan-
Russell, S. H. M. (Darwen)


Boulton, W. W.
Hills, Major Rt. Hon. J. W. (Ripon)
Samuel, M. R. A. (Putney)


Braithwaite, Major A. N.
Horsbrugh, Florence
Sanderson, Sir F. B.


Brown, Col. D. C. (Hexham)
Hudson, Capt. A. U. M. (Hack., N.)
Sassoon, Rt. Hon. Sir P.


Browne, A. C. (Belfast, W.)
Hunter, T.
Scott, Lord William


Bull, B. B.
Jones, L. (Swansea, W.)
Shaw, Major P. S. (Wavertree)


Campbell, Sir E. T.
Kerr, Colonel C. I. (Montrose)
Simmonds, O. E.


Channon, H.
Kerr, J. Graham (Scottish Univs.)
Simon, Rt. Hon. Sir J. A.


Chapman, A. (Rutherglen)
Kimball, L.
Sinclair, Col. T. (Queen's U. B'lf'st),


Colville, Lt.-Col. Rt. Hon. D. J.
Lamb, Sir J. Q.
Smith, L. W. (Hallam)


Cooper, Rt. Hn. A. Duff (W'st'r S.G'gs)
Latham, Sir P.
Southby, Comdr. A. R. J.


Craddock, Sir R. H.
Leckie, J. A.
Storey, S.


Craven-Ellis, W.
Leech, Dr. J. W.
Strauss, E. A. (Southwark, N.)


Cross, R. H.
Lennox-Boyd, A. T. L.
Strauss, H. G. (Norwich)


Crowder, J. F. E.
Llewellin, Lieut.-Col. J. J.
Stuart. Hon. J. (Moray and Nairn)


Cruddas, Col. B.
Lloyd, G. W.
Sueter, Rear-Admiral Sir M. F.


Davidson, Rt. Hon. Sir J. C. C.
Loftus, P. C.
Thomas, J. P. L. (Hereford)


Dawson, Sir P.
Lyons, A. M.
Thomson, Sir J. D. W.


Duckworth, G. A. V. (Salop)
Mabane, W. (Huddersfield)
Tree, A. R. L. F.


Duckworth, W. R. (Moss Side)
Macdonald, Capt. P. (Isle of Wight)
Tufnell, Lieut.-Com. R. L.


Duggan, H. J.
McEwen, Capt. J. H. F.
Wakefield, W. W.


Duncan, J. A. L.
McKie, J. H.
Ward, Lieut.-Col. Sir A. L. (Hull)


Elliston, G. S.
Margesson, Capt. Rt. Hon. H. D. R.
Ward, Irene (Wallsend)


Emery, J. F.
Markham, S. F.
Waterhouse, Captain C.


Emrys-Evans, P. V.
Mayhew, Lt.-Col. J.
Wickham, Lt.-Col. E. T. R.


Entwistle, C. F.
Mellor, Sir J. S. P. (Tamworth)
Williams, H. G. (Croydon, S.)


Errington, E.
Mills, Major J. D. (New Forest)
Wise, A. R.


Erskine Hill, A. G.
Moore, Lieut.-Col. T. C. R.



Everard, W. L.
Muirhead, Lt.-Col. A. J.
TELLERS FOR THE AYES.—


Fleming, E. L.
Neven-Spence, Maj. B. H. H.
Major Sir George Davies and


Fraser, Capt. Sir I.
Nicolson, Hon. H. G.
Captain Arthur Hope.


Fremantle, Sir F. E.
O'Connor, Sir Terence J.





NOES.


Alexander, Rt. Hon. A. V. (H'Isbr.)
Griffiths, J. (Lianelly)
Kelly, W. T.


Anderson, F. (Whitehaven)
Hall, G. H. (Aberdare)
Lawson, J. J.


Banfield, J. W.
Hall, J. H. (Whitechapel)
Leonard, W.


Barr, J.
Hardie, G. D.
Logan, D. G.


Bevan, A.
Harris, Sir P. A.
Lunn, W.


Burke, W. A.
Henderson, A. (Kingswinford)
MacMillan, M. (Western Isles)


Dagger, G.
Henderson, T. (Tradeston)
Mainwaring, W. H.


Dalton, H.
Jagger, J.
Marklow, E.


Ede, J. C.
Johnston, Rt. Hon. T.
Messer, F.


Edwards, Sir C. (Bedwellty)
Jones, A. C. (Shipley)
Milner, Major J.


Garro Jones, G. M.
Jones, Morgan (Caerphilly)
Montague, F.




Paling, W.
Smith, E. (Stoke)
White, H. Graham


Potts, J.
Smith, T. (Normanton)
Williams, E. J. (Ogmore)


Pritt, D. N.
Stewart, W. J. (H'ght'n-le-Sp'ng)
Williams, T. (Don Valley)


Roberts, W. (Cumberland, N.)
Tate, Mavis C.
Windsor, W. (Hull, C.)


Rowson, G.
Taylor, R. J. (Morpeth)
Woods, G. S. (Finsbury)


Seely, Sir H. M.
Thurtle, E.



Simpson, F. B.
Tinker, J. J,
TELLERS FOR THE NOES.—


Smith, Ben (Rotherhithe)
Westwood, J.
Mr. John and Mr. Mathers.


Bill read the Third time, and passed.

Orders of the Day — ROAD TRAFFIC (DRIVING LICENCES) BILL.

1.2 a.m.

Mr. STOREY: I beg to move, "That the Lords Amendments be considered forthwith."
They are all of a drafting character.
Question put, and agreed to.
Lords Amendments considered accordingly, and agreed to.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Wednesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Four Minutes after One o'Clock.